Financial Process Automation
Use Cases, Features, Benefits, Costs
ScienceSoft applies 15 years of experience in building corporate finance software for companies in 30+ industries to implement effective financial process automation.
Financial Process Automation in a Nutshell
Financial process automation helps businesses eliminate manual efforts across finance-related tasks, including bookkeeping, invoicing, payroll accounting, financial planning and analysis, revenue management, tax management, investment and financial risk management, and more.
Depending on their specific needs, companies can implement a financial process automation solution to digitalize particular financial operations or enable end-to-end automation of all corporate finance activities.
Implementation time: 6–13+ months.
Costs: $200,000–$1,500,000+, depending on the automation solution complexity.
Annual ROI: 200–290%.
Main Use Cases of the Financial Process Automation
Financial accounting and reporting
Automate 75%+ of tedious accountants’ tasks and get increased productivity of your accounting team along with full visibility of financial transactions. Benefit from 90% improvement in bookkeeping and financial reporting accuracy due to eliminated manual errors.
Billing and invoicing
Free your billing team for high-value tasks. A robust financial process automation system can eliminate up to 90% of manual billing-associated workflows. You get 2–3x faster and more accurate invoicing and around 50% reduction in DSO.
Financial planning and analysis
Streamline your financial planning and analysis processes and get instant access to the finance data you need. Harness the power of AI to achieve 90%+ financial forecasting accuracy and improved decision-making on financial and strategic activities.
Treasury management
Plan liquidity with full insight of enterprise-wide financial performance and reduce idle cash by up to 50% with intelligent guidance on optimal investing decisions. Get 50–75% reduction in financial risks due to real-time risk exposure calculation and tracking.
Compliance management
Entrust your tax and revenue management operations to the automation system and enjoy 100% compliance with the latest legal regulations. Get accurate tax and revenue reporting, faster tax payment and revenue recognition.
Pricing management
Get 4x faster price calculation and 3x faster price updating across various selling channels due to automation. AI suggestions on the pricing strategy optimization can bring 3–15% increase in sales revenue and 1–8% increase in gross margin.
Bookkeeping automation
- Automated creation, updating and approval of journal entries in the general ledger (GL) and subledgers on external and intercompany financial transactions, including multi-currency transactions.
- Automated GL entries to the pre-defined books or to multiple books simultaneously.
- Scheduled recurring and reversing journal entries.
- Automated attachment of source documents (invoices, receipts, cheques, payroll reports, leases, etc.) to each journal entry.
- Rule-based GL coding and transaction classification by category (asset, liability, equity, revenue, expenses, etc.).
- Automated calculation and consolidation of GL balances across multiple business entities.
Order-to-cash automation
- Template-based generation of customer invoices, including recurring invoices.
- Calculation and application of taxes, discounts, additional charges (e.g., interest on late payments, insurance, carriage), and billable expenses.
- Automated workflow for multi-department customer invoice approval.
- Scheduled sending of invoices to customers.
- Real-time customer invoice tracking by status (approved, paid, open, etc.).
- Calculating the received, due and overdue amounts, DSO, accounts receivable (A/R) turnover ratio, and more.
- Automated payment collection via various payment methods, including bank transfers, wire transfers, ACH, credit cards, cheques, or by direct debit.
- Automated allocation of received payments to customer invoices.
- Scheduled reminders to customers on due payments.
Invoice-to-pay automation
- OCR-enabled conversion of paper purchase invoices into a pre-defined digital format.
- Automated capture and extraction of purchase invoice data and its validation against corresponding purchase orders.
- Real-time purchase invoice tracking by status (valid, paid, due, etc.).
- Calculating the amounts paid, partially paid, owed, DPO, accounts payable (A/P) turnover ratio, etc.
- Scheduled payments to suppliers, vendors, governmental entities, etc.
- AI recommendations on optimal payment methods and payment dates.
Payroll and reimbursement automation
- Automated calculation of employee salaries, overtime, bonuses, commissions, deductions, etc.
- Automated capture, extraction, and validation of data provided in receipts on business-related employee expenses (accommodation in business trips, transport, telecoms, etc.).
- Automated workflows for multi-department expense approval.
- Automated calculation of reimbursement amounts per employee.
- Scheduled payroll and reimbursement payments to employees.
Treasury automation
- Real-time monitoring of cash flow, liquidity, working capital, cash balances across bank accounts, transactions on investment and financing activities across various asset classes, and more.
- Automated cash positioning based on the consolidated bank statement data.
- Automated classification of cash transactions (A/R, A/P, payroll, etc.).
- Calculating capital gains and losses, accrued interest, yields, duration, total return by investment portfolio, asset class, region, etc.
- Calculating and scheduling principal and interest payments on the existing liabilities.
- Calculating and monitoring the fair value of assets and liabilities, exposures for FX and commodities, CVA and DVA, CFAR and VaR, and other essential financial risk metrics.
- AI recommendations on optimal hedging strategies.
Financial planning and analysis automation
- Calculating and monitoring user-defined financial performance parameters by period, location, business entity, etc.
- Trend-based financial performance analysis and forecasting.
- Automated adjustment of financial forecasts as new financial data appears.
- Monitoring and analysis of financial forecast variance.
- Template-based budget creation at the enterprise, business entity, department, project level.
- Scenario modeling and what-if analysis for budgets and strategic financial transactions.
- AI-based suggestions on optimal budgets, profitable and risky financial performance scenarios, and more.
Tax management automation
- Calculating VAT, sales, use, withholding, income, and other taxes based on the tax rates in regions a company operates.
- Automated tax filing under region-specific regulations.
- Scheduled tax payment.
Revenue management automation
- Calculating revenue by product, location, customer contract, customer segment, business entity, etc.
- Automated calculation of total expected contract revenue under each customer contract and its allocation to the separate performance obligations based on their relative SSP.
- Automated revenue recognition according to the up-to-date accounting standards.
Automated reconciliation
- Automated reconciliation of financial data in bank statements with GL, A/P and A/R records.
- Automated removal of duplicate transaction records.
- Automated defining of outstanding transactions and marking them for manual reconciliation by accountants.
- Automated intercompany reconciliation.
Automated financial reporting
- Template-based generation of financial reports (monthly, quarterly, yearly, etc.) by region, entity, or consolidated reports, including:
- Balance sheet.
- Profit and loss statement.
- Statement of changes in equity.
- Cash flow statement.
- Tax summary.
- Revenue recognition report, and more.
- Automated financial report submission to the user-defined governmental entities, financial institutions, the company stockholders, etc.
Financial Process Automation System Architecture
There are several main architectural options for a financial process automation solution, each having its benefits and limitations. ScienceSoft suggests choosing the one that fits your business needs best.
1. Implementing a solution composed of several ready-made or custom modules (or the combination of both), each automating a particular financial process and having its own data store. This option offers automation of all required financial activities and enables flexibility to independently evolve each solution’s module with new features as new business needs arise. However, the solution with such an architecture is resource-intensive to build and maintain and requires profound project management at the implementation stage.
2. Implementing a custom-made highly integrated financial application. This option offers reduced software implementation time and simplified financial data governance due to centralized data storage. On the downside, a solution with such an architecture is difficult to evolve and scale. To connect it smoothly to other business-critical systems, you will also need to employ proper middleware (e.g., an ESB solution), which requires additional costs.
3. Implementing a ready-made highly integrated financial suite to cover core financial process automation functionality and add several custom applications for areas where the suite cannot fully satisfy your company’s needs. This option allows quickly introducing automation of fundamental finance-related tasks in case you don’t need suite customization to meet your highly specific business requirements.
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ScienceSoft recommends: To get faster development and deployment of a cost-efficient and inherently scalable solution, you can consider adding serverless functions, each handling a particular financial team’s task. This approach helps to effectively automate periodic workloads that require a lot of data processing, e.g., preparing regular financial reports or processing scheduled payment flows. The functions can be independently invoked and auto-scaled on demand. However, such an architecture raises security and latency concerns. |
Maximized automation of rule-based financial tasks
To eliminate manual efforts across financial processes and free up the financial team for high-value, strategic financial activities.
AI-powered analytics
To predict accurately various financial performance variables and provide the financial team with intelligent recommendations on optimal decisions across financial processes.
User-friendly financial data visualization
To provide well-structured representation of financial data and financial performance patterns for facilitated insights on financial risks and opportunities.
Easy-to-use APIs
To facilitate integration between the solution’s modules and enable smooth connection to other business-critical systems.
Legal compliance
To ensure creation of financial documents in accordance with the latest global, country- and industry-specific regulations, such as GAAP, SOX, ZATCA regulations (for Saudi Arabia), GDPR (for the EU), and more.
Powerful security capabilities
To ensure the protection of sensitive data and minimize the risk of malicious user activities with role-based access control, intelligent detection of financial fraud, end-to-end audit trail for all financial activities, and more.
Key Integrations for the Financial Process Automation System
To ensure maximized automation across financial processes, ScienceSoft recommends that a financial solution should be integrated with the following business-critical systems:
- ERP – for accurate financial planning and budgeting; to consider budget limitations during operational and strategic activities.
- CRM – for the automated input of customer data, payment terms, price and quantity of ordered goods when generating invoices; for the automated calculation and recording of sales revenue in the general ledger, accurate revenue recognition and data-driven revenue forecasting.
- Procurement software – for the automated purchase order recording in the A/P ledger.
- Inventory management software – for accurate recording of inventory values on inventory purchasing and utilization.
- Asset management software – for the automated recording of the fixed asset depreciation.
- HR management software – for the automated payroll calculation.
- Bank accounts – for faster reconciliation.
- Financial data marketplace – for the automated investment portfolio valuation, fair value calculation, building data-driven hedging strategies.
- BI solution – for advanced financial performance analytics and reporting.
Financial Process Automation Costs
The cost of financial process automation implementation varies greatly depending on:
- The type of the finance automation solution’s architecture.
- The number and complexity of the solution’s functional modules.
- The degree of automation (implementation of robotic process automation (RPA) and AI-powered features).
- The volume of data that needs to be migrated from the spreadsheets and/or legacy financial software.
- The number and complexity of integrations with corporate systems, and more.
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A custom financial process automation system of moderate complexity requires $200,000–$500,000 in investments. A full-fledged solution that enables end-to-end automation of complicated financial processes for global multi-entity enterprises may cost $500,000–$1,500,000+. |
NB! Using low-code platforms can substantially reduce the costs of creating a solution for finance automation. In ScienceSoft’s financial process automation projects, we rely on Microsoft Power Apps to offer 74% lower development costs.
Benefits and ROI of Financial Process Automation
Despite the substantial investments, financial process automation can bring 200–290% annual ROI, driven by the following benefits:
You need a financial management solution providing automation of your specific tasks, e.g., calculating payroll, taxes, or the fair value of assets and liabilities based on custom formulas, creating A/R collection and A/P payment queues based on specific priority rules.
You have large teams involved in financial management and want to avoid a considerable subscription cost for platform-based financial process automation software, which scales with the number of users.
You operate in a highly regulated industry (e.g., healthcare, defense, government sector) and need a financial process automation solution to provide advanced tools to protect your sensitive financial and business data.
Off-the-shelf automated financial software requires costly and time-consuming integration with your business-critical systems.
Ready-made financial solutions don’t provide compliance with local regulations in the regions your company operates.
You need a flexible solution that can be easily upgraded with new functional and non-functional capabilities and advanced techs, when needed.
Consulting on finance automation
- Analysis of financial process automation needs.
- Assessment of the existing financial processes, tools and their integration points.
- Suggesting optimal financial automation features and solution architecture and tech stack.
- Preparing an plan of integrations with the required systems.
- Implementation cost & time estimates, expected ROI calculation.
Implementation of finance automation
- Financial process automation needs analysis.
- Automated finance solution conceptualization.
- Architecture design.
- Development of the financial process automation system.
- Solution integration with the required systems.
- Quality assurance.
- User training.
- Continuous support and evolution (if required).
About ScienceSoft
ScienceSoft is an international IT consulting and software development company headquartered in McKinney, Texas. Since 2007, we help businesses implement effective automation in finance. Being an ISO 9001 and ISO 27001 certified company, we apply a mature quality management system and guarantee that cooperation with us does not pose any risks to our customers’ data security. If you are interested in getting a robust financial process automation solution, feel free to turn to ScienceSoft’s team.