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Automation in Finance Collection, Reconciliation, Dunning,

Automation is quickly becoming the norm in nearly every area of financial services, from customer experience to internal operations. In particular, automated collection, reconciliation and automated dunning offer a range of advantages for businesses. By leveraging automation capabilities, businesses can streamline finance activities for increased speed and accuracy. As a result, the business operations will be more efficient than ever! In terms of automating finance, KredX Cash Management Solutions can handle it all, from collections to reconciliation to dunning. 

In this blog post, we will cover some of the most notable benefits and challenges posed by automation in finance for B2B, as well as ways organisations can successfully implement it into their operations. Keep reading to learn more about leveraging automation for smarter decisions.

What is Finance Automation?

Finance automation uses technology to automate financial processes, such as bookkeeping and accounting, budgeting and forecasting, reporting, compliance, and audit functions. This type of automation helps make the finance function more efficient by reducing manual work and improving accuracy. By eliminating errors associated with human data entry or calculations, finance automation can help reduce overall costs and improve decision-making.

Finance automation also gives organisations greater control over their finances by providing real-time visibility into their financial position. With automated tools, organisations can monitor cash flow in near-real time and detect potential issues before they become problems. Automation can also facilitate faster responses to changing market conditions via predictive analytics, which can identify future trends based on past performance.

Overall, finance automation provides organisations with a competitive edge by allowing them to respond quickly to changes in the market or regulations while controlling costs and improving efficiency. By automating mundane and repetitive tasks, organisations are able to free up time for more value-added activities that will help drive growth and profitability.

What Processes should be Automated in Finance?

There are a variety of processes within the finance department that can be automated. In particular, accounts payable, accounts receivable, payroll, and account reconciliations are some of the most commonly automated processes. Automating these processes can help increase accuracy and reduce errors while simultaneously improving response times and visibility into cash flow.

1. Accounts Payable

Streamlining and automating the accounts payable process can help ensure that all invoices are captured, approved, and paid on time. Automation can also help to eliminate manual data entry tasks, reduce paperwork, and improve accuracy by flagging duplicate payments or incorrect calculations. This type of automation can significantly reduce processing times while improving visibility into vendor spend.

2. Accounts Receivable

Automated solutions for accounts receivable can simplify customer payment processes by providing customers with real-time updates on their outstanding balances and streamlined access to payment portals. Automated tools can also give customers access to electronic invoices for faster resolution of disputes or inquiries. By reducing manual data entry tasks associated with accounts receivable, organisations will be able to realise cost savings and improve cash flow.

3. Payroll

Finance automation can help reduce costly errors associated with manual payroll processing by automating the calculation of employee hours, deductions, and taxes. Automation can also facilitate faster payment times by providing employees with secure online access to their pay stubs and paychecks. This type of automation ensures compliance with regulations while simultaneously improving accuracy and visibility into labour costs.

4. Account Reconciliations

Account reconciliation is an important part of the financial process, verifying that a company’s accounts are accurate and up-to-date. Automated solutions for account reconciliations can eliminate manual tasks such as data entry or spreadsheets by providing real-time visibility into accounts and transactions. Automation can also reduce the risk of fraud by flagging any discrepancies in real-time.

What are the Benefits of Finance Automation?

The perks of finance automation can be broken down into primary categories: cost savings, error reduction, employee satisfaction, scalability, and transparency.

1. Cost Savings

Automating repetitive or manual tasks associated with the finance function can help organisations realise significant cost savings by eliminating the need for additional staff or outsourced services. Additionally, automation can reduce overhead costs, such as paper invoices and filing fees, while improving vendor payment cycles.

2. Error Reduction

By automating mundane tasks associated with finance activities, organisations are able to significantly reduce the risk of costly errors due to human error. An automated B2B cash management  system provides accurate information in real-time, eliminating inconsistencies or discrepancies resulting from manual data entry.

3. Employee Satisfaction

Finance automation can free up valuable time for employees by reducing mundane tasks so that they can focus on more strategic activities. Automating processes also provides employees with a better understanding of costs and cash flow, which can help to improve decision-making capabilities.

4. Scalability

Finance automation solutions are designed to be scalable, meaning that they can grow as the organisation grows. This allows businesses to easily adjust their processes in order to accommodate changes in customer demand or market conditions without having to invest additional resources into manual labour or cumbersome infrastructure upgrades.

5. Transparency

By automating financial processes and providing real-time visibility into accounts and transactions, organisations are able to establish greater transparency across the business. Automation provides an up-to-date audit trail which allows stakeholders to quickly identify and resolve any discrepancies to ensure accuracy across the finance process.

How can Businesses Automate Financial Processes?

The process to automate financial processes typically involves the following steps:

1. Collections

The first step is to create collections automation in the finance system so that all accounts receivable and payable activities are tracked accurately. This includes setting up automated payment reminders, creating invoices, and providing customers with access to electronic invoices for faster resolution of disputes or inquiries.

2. Reconciliation

The next step is to automate the process of reconciling accounts by leveraging real-time data on assets and liabilities. Automating reconciliation automation in finance will ensure accuracy while reducing errors associated with manual data entry tasks. 

3. Dunning

Dunning (or debt collection) automation helps organisations streamline the process of collecting payments from customers who are past due on their obligations. Dunning automation in finance can be done through automated email notifications or SMS messages in order to ensure timely payments.

By automating these processes, organisations are able to gain real-time visibility into financial activities while also reducing costs and improving accuracy. Additionally, automation can help to improve customer service by ensuring that accounts are managed efficiently and responsively. Ultimately, this can lead to improved efficiency and performance across the finance operation.

One-Stop-Shop to Automate Finance

Modern enterprise software like KredX Cash Management Solutions does it all, helping businesses to automate the finance process and make it more efficient. The solutions are designed to offer businesses complete visibility into their financial activities while also providing data-driven insights for better decision-making capabilities. From collections and reconciliations to dunning, KredX Cash Management Solutions is the one-stop shop for automating finance!

With KredX, businesses can save time and resources by streamlining the entire finance process from end to end. The intuitive dashboard makes it easy to monitor accounts receivables and payables, track customer payments in real-time, send automated reminders for past due invoices, reconcile accounts quickly with accurate data, and even manage debt collection processes with ease.

Manish Kumar

CEO and Founder, KredX

Manish spent a decade in the finance and banking industry, including a successful stint at HSBC, before founding KredX in 2015. He took his expertise in accelerating capital velocity and created a platform that has become a growth catalyst for hundreds of Indian businesses, big and small. The journey has been triumphant, KredX featured among the top 100 leading global Fintech innovators in the KPMG-H2 Ventures 2017 Fintech100 list and Manish was recently awarded the Entrepreneur of The Year in Business Services at the Annual Entrepreneur India Awards. You can reach him through LinkedIn.