What is intelligent finance automation?
When discussing the topic of finance management innovation and digitalisation, the following questions are often asked:
- What are intelligent finance automation and enhanced finance control and automation (EFCA)?
- How does it differ from robotic process automation (RPA)?
- What defines intelligence in this context?
- How is intelligent finance automation closing the gap on reaching cognitive engagement of artificial intelligence (AI)?
Before Clive Jefferies delves into defining what makes finance automation intelligent, a common ground must be acknowledged: whatever the solution is, the primary goal of finance management digitalisation is to help businesses improve efficiency of their finance operations at lower costs than current methods. It is the differences among these technologies that create additional value to companies and define the role of people in the process.Article by Clive Jefferies, product manager at Aico, one of CFO Services' partner organizations.
These are the main characteristics that define Aico and intelligent finance automation and control in general:
People in the loop
The common myth about automation is that people are being replaced with robots and hence there is no real human control over the processes. The real-life application of intelligent finance automation shows exactly the opposite – it is the tasks that people are doing that are replaced, not people themselves. Intelligent automation can be regarded as a co-worker who manages all the complex, slow, and arduous tasks and leaves people more time to focus on high-value and high-efficiency duties. This collaboration model saves time and allows better control instead of no control.
Similarly, research on intelligent technology impacts on businesses done by Harvard Business Review shows that “replacing administrative employees was neither the primary objective nor a common outcome. Only a few projects led to reductions in head count, and in most cases, the tasks in question had already been shifted to outsourced workers.”
End-to-end process management
In a recent study conducted by APQC, the top business process management challenge for companies is to define and map end-to-end processes. This holistic approach of dealing with the whole process instead of applying stand-alone rule-based automation solutions is what defines intelligent finance automation. Typically, an intelligent finance automation solution covers the complete workflow of finance processes, which leads to more efficiency and greater returns. For people, this means better collaboration and integrity and transparency of processes. And – most importantly – time for focusing on more analytical and higher-value tasks.
A good example of this end-to-end process management approach is Aico’s solution for manual journal entries. Apart from automating certain sub-processes like journal postings and creation of recurring or reversal journals, Aico also helps finance departments control and manage the whole journal entry process. For example, system users can define who has the right to create different types of journals, what kind of approvals they need, and by whom journals are transferred to ERP systems. Along with process role definitions, the solution supports users with necessary means for creating, posting, and handling journals. In this way, an intelligent solution like Aico optimises the whole process, not just individual parts of it.
Synergy through real-time integrations
While companies are under pressure to digitise their finance processes and to make smart investment decisions about the right tools, intelligent automation comes in to synergise all existing infrastructure, solving the problem of using multiple systems with no or very little inter-connectivity. Rather than eliminating all the effort and investment done so far for the existing finance processes, intelligent finance automation connects all ERP systems, RPA process robots, and people to create efficiency, no matter what the current process is.
An intelligent finance automation platform like Aico helps companies synergise their systems also by enabling the transfer of data between ERPs in real-time. This means people in the finance departments don’t have to waste their time on mechanical tasks like exporting and importing data files, instead their time and efforts are used for analysing data and remediation actions. When creating new journal entries, this means that there is no need to spend time on validating data like company codes and bank account numbers and collecting supporting evidence from multiple ERP systems. Aico manages these tasks automatically and in real-time.
Intelligent finance automation and control helps performing a large number of tasks across multiple systems
and legal companies
, while delivering real-time insights and reports at the same time. This real-time dashboard reporting capability
has deep impact on the actual finance process management, but also on business decision making. Faster and more accurate internal management reports and external financial statements are highly valuable assets for executives, while finance departments can streamline their processes and avoid bottlenecks caused by lack of status data and transparency.
When processing journal entries, real-time dashboard reports allow users to view and keep track of the status of journals as they progress through the workflow. This is especially helpful during the period close – Aico dashboards and lists make it easy to track closing activities and report their progress.
While companies might have the same general need for close, consolidation, and reporting, no two companies are the same when it comes to internal processes, systems in use, as well as intracompany and intercompany networks. This is where the additional value of high customisation and adaptiveness of intelligent finance automation becomes crucial. Adapting to the company specifics and allowing to define detailed parameters by which the software runs make intelligent automation solutions unique.
Aico is highly configurable and it allows you to flexibly create your ideal finance workflow to match your unique organizational structure, internal processes and your ERP systems. Alternatively Aico can be set up following best practice template. This allows companies to set up and utilise Aico in a variety of ways. Manual opening and closing, journal entry requests, credit releases, general ledger account clearing, and internal orders are just a few examples of how flexibly Aico’s customers utilise this intelligent request automation solution.
In-between RPA and AI
Aico can be regarded as an enhanced finance control and automation solution. On one hand, it can perform robotic processes by itself or utilise existing RPA tools and combine them with larger and more complex process actions. On the other hand, end-to-end approach and connectivity allows it to utilise the potential of AI.
An intelligent finance automation solution like Aico can be applied for a variety of finance management processes. Regardless of where your company is at in the inevitable process of finance digitalisation, intelligent automation can be applied and utilised for core finance functions like account reconciliations
, end-period closing
, manual journal entries
, or a variety of requests
for faster, more accurate, and cost-effective results.