For years, many finance teams have exhausted hours on unnecessary manual tasks, i.e. spreadsheets, attachments, emails, etc. All of these aforementioned methods risk delays, improper approvals, and lack of visibility. A recent APQC survey showed that FP&A participants reported spending 75% of their time gathering data and administering finance processes, instead of conducting financial analysis and strategic planning.
The alternative is putting processes such as these into a workflow automation system. Automation eliminates the time previously spent by finance teams grinding through endless spreadsheets, and reduces the number of manual controls, reporting errors, and operational costs of the finance and accounting function.
The adoption of a quality FP&A software offers such automation. Any finance team can make serious improvements in their work efficiency, and accuracy of their data from integrating an FP&A software that automates traditionally manual tasks.
Human error is a common, and unfortunately, a watershed factor in the resulting quality of data set. Errors are common, even with experienced users - the more data sources, the more formulas, the ‘larger’ the spreadsheet, the greater the chance for small errors to be magnified. Recent surveys show that 88% of spreadsheets contain errors.
According to experts, there are three primary error types;
Mechanical error – inputting, typing, copy/paste errors which may appear small but can fundamentally impact the integrity of the entire model as the complexity of the spreadsheet grows
Logic error – flawed calculations generated from inappropriate or incorrect formulas and algorithms
Omission – one of the most common and most difficult to spot errors is where data is simply not incorporated in the first place
` If the fact that only 12% of spreadsheets will be accurate isn’t enough to emphasize the need to adopt automation, the gravity of such errors should illustrate just how serious this problem can be. A spreadsheet mistake in October 2003 required Fannie Mae to restate its unrealized gains by an amazing $1.2 billion—shortly after it had announced third-quarter earnings. In another case, a simple spreadsheet error caused a company’s stock price to tumble so dramatically that trading was halted.
Instead of emailing back and forth, and trudging through spreadsheets in a slow and error prone manner, automated workflow allows data to be easily collected in real time, all in one place.
The automation enabled by FP&A software has proved to result in dramatic improvements. Based on a 2019 APQC survey of FP&A professionals, some of FP&A automation’s most significant benefits include:
50% reduction in budget cycle time
70% time savings in their planning processes
Reduction in manual budget data collection/consolidation by up to 75%
Streamlining of budget reviews and approvals by up to 50%
Automate and accelerate management and financial reporting by up to 50%
When you enter data into an automated system, you only need to do it once, and the same goes for any updates, as information is immediately propagated across the system. This makes it much easier to manage payroll, expenses and other processes that require inter-departmental working. When employees no longer have to spend as much time on data entry, they’re free to make better use of their skills, improving the analytical and creative aspects of your business. It’s also easier for them to communicate and quickly access records as required.
Any company can make serious advancements by improving the accuracy and efficiency of their finance teams. Implementing a software that automates traditionally manual tasks is evidently the best way to do this. Companies like CashWeb Community, Pureshare Activemetrics, and DataRails offer some of the best software that automate processes for finance professionals.