CFO and Technology » Manual accounting is fast becoming a liability for the finance function

Manual accounting is fast becoming a liability for the finance function

In the Great Resignation era, automating Accounts Receivable and reducing manual and repetitive tasks gives organisations a competitive edge, while also boosting operational efficiencies

Manual accounting is becoming a growing liability for finance teams and businesses struggling with the Great Resignation and high working capital demands.

“In the context of the Great Resignation, there are two types of organisations,” says Kevin Kimber, managing director of global AR at BlackLine.

On the one side, “There are those that are leveraging technology and driving automation, enabling their organisation and employees to have choices in terms of how they operate, how they work, and where.”

On the other, there are teams that aren’t leveraging technology and are therefore unable to offer staff choice. These companies are left mandating employees return to the office, Kimber says.

The new climate and uncharted environment are at the top of the agenda for CFOs. In fact, Deloitte’s 2021 CFO Signals report highlighted that talent retention and well-being management represent critical risks for CFOs—heightening pressure on driving employee engagement and providing a workplace that caters to the demand of increased flexibility.

“I would draw a direct correlation between [technology] and a greater chance of avoiding a Great Resignation,” Kimber argues, “because [when employees are asked] to do really meaningful work, they are motivated to do it, as opposed to manual work on spreadsheets that, frankly, technology can and should be [handling].”

Manual accounting is also creating organisational inefficiencies: a report by PwC revealed global organisations using better working capital management could release around €1.5trn on their balance sheets.

“By continuing to operate in an onerous and labour-intensive way, cash collection remains largely inefficient. Fundamentally, you’re not optimising your working capital or reducing your bad debt provision to their optimum levels.”

It negatively impacts the customer base by creating unnecessary tension in the customer relationships. In addition, employees chasing cash that is already on accounts, yet unapplied, is a waste of valuable time, Kimber adds. Conversely, introducing automation in accounts receivable, while adopting Continuous Accounting, enables finance teams to work on analysing the data, creating deeper insights, and driving stronger efficiencies.

Leveraging Technology Platforms

Last month, BlackLine expanded its offering with a unified accounts receivable (AR) platform offering finance function capabilities, including cash application, collections management, credit risk management, team and task management, and dispute management.

The platform automates the full invoice-to-cash process, providing the finance function with visibility of its cash in real time and to support CFOs in their cash management and working capital needs—something high on companies’ post-pandemic agenda.

Using artificial intelligence, the platform enables businesses to make intelligent decisions around optimising how and where they do business with their customers.

Having a unified platform, “enables customers to look at the potential to automate in the space and do so in a very streamlined and efficient way,” Kimber says. It provides a huge reduction in manual processing and helps teams achieve a rapid time-to-value, he adds.

“One of the challenges organisations face when looking at areas like finance, from a transformation perspective, is that they look at it through a lens of driving efficiency internally.”

Upgrading the current processes with automation also carries external benefits, says Kimber. The platform allows businesses to have a better understanding of the customer base, and how customers interact with the business, providing firms with the opportunity to optimise customer relationships.

The Great Resignation

In the Great Resignation backdrop prompted by the pandemic, talent retention, cost efficiencies, and flexibility for finance teams remain at the forefront of many employers’ minds.

Forty-one percent of employees say they are considering leaving their current employer this year and 46 percent say they’re likely to move locations because they can now work remotely, according to a report by Microsoft.

The current employee-led job market means competition is even higher for firms to attract top talent, increasing the pressure to reduce manual and repetitive tasks.

In 2022, it’s mission critical for organisations to facilitate the transition to hybrid and remote working. They have to ensure staff has access to the right technology so “the office becomes the individual laptop,” says Kimber.

Those who do this well are “able to attract the very best talent,” giving organisations an additional competitive edge as they move forward, he adds.

Learn more about AR automation.


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