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What tasks can you automate to save time and stress in your finance department?

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By Paul Sparkes, Commercial Director at award-winning accounting software developer iplicit

 

We’re set to see 85 million jobs worldwide displaced by automation by 2025, according to the World Economic Forum.

And yet, in your finance department, there’s a high chance people will be slogging through menial tasks that they would happily hand over to a machine tomorrow.

These tasks are often the reason people in finance dread the end of the month, let alone the end of the year. And the staff doing them are likely to include senior people who could be adding serious value to the business – not to mention going home on time.


What is automation and what tasks could you be automating?

Automation in accounting means using software to handle the kind of routine tasks that no longer need to be dumped on the desk of an overworked human.

These are all the processes where figures and data need to be input, totted up or moved from one place in your system to another.

To get a sense of automation’s possibilities, think about that host of laborious tasks which need to be done but don’t add conspicuous value. (“Congratulations – you guys worked out the monthly accruals,” said nobody ever.)

For example:

Group VAT returns. Are you a group of two or more companies, submitting a group VAT return? And does that require someone to manually input information into an adjustment journal for each company? Automation could be taking care of that.

Intercompany transactions. If Company A in your group creates a sales invoice, automation could create a corresponding purchase invoice for Company B.

Deferred income and revenue recognition. Let’s say you are an SAAS (software as a service) provider, or you sell subscriptions or memberships. Maybe you are a service/contract type of organisation. Whatever your business model, if you have to deal with deferred income or recognise revenue, you will be familiar with the compliance, the time and the energy sapping work that can be involved in managing those areas. Automation can take care of correctly and compliantly spreading that income over the course of its life.

Group payments. If Company A pays a supplier on behalf of the whole group, that transaction could be automatically allocated between Companies B, C, D and E.

Foreign exchange gains and losses. There’s no need for these to be tied up manually each month when software can do that job.

Intercompany journals and eliminations. It’s a painful and laborious business having to manually work out and process adjustments and strip out intercompany transactions, so that you, the management team, your investors and the auditors get the right consolidated view of the group’s position. Good news: they can be automated and in real time, regardless of the number of companies in the group.


How automation can save you time and money

Every business would like to be more productive. Times are challenging, costs are rising, and organisations need to seek every efficiency gain they can, without compromising service.

In such an environment, doing those menial tasks the old-fashioned way might be costing you more than you think – especially if highly-trained members of the finance team are bogged down by grunt work.

If the financial director is spending the last Friday of every month writing into journals and doing calculations, there’s a cost involved – especially when that FD could be contributing their unique talents more fully to the management team and the rest of the organisation.

Working out those monthly accruals, sifting all those outstanding purchase orders… it’s all a significant task when multiplied by however many times it needs to be done, whether it’s 10 or 100.

If automation can save a senior finance person three or four hours a month, that’s an attractive return on the investment, as well as a potential Friday afternoon off.

Automate 10 processes a month and, even if each of them took only half an hour, you’re on your way to freeing up an entire day of staff time. Add more staff or more processes into that calculation and you can soon start to see hundreds of staff hours saved.

Those hours can be released for staff to spend on the activities that really use their talents and benefit the business, improving efficiency and the bottom line.


Automation can make your staff happier

Nobody likes to spend their days on tedious, manual tasks.

If you overload your team with boring work – and set them up to dread certain days of the week or the month – you’re at risk of losing them. And we all know that talent is hard to come by and that high staff turnover is wasteful and expensive.

What’s more, the businesses which are automating are in a good position to snap up the best people, leaving other organisations lagging behind and struggling to recruit.

So investing in automation now can pay off with happier, more motivated teams.

Automation improves accuracy

We’ve seen how automation can improve productivity, but it can also improve accuracy.

To err is human – and every process that’s automated is one less point where an error can be made in transcribing figures or inputting data.

And if you can lighten the burden of heavy workloads and tedious tasks, then staff are less likely to make mistakes at the points where their input is needed.

This doesn’t mean handing over all control to a computer. But with automation, if something has gone awry in the data, the FD or CFO might spend minutes reviewing what the system has worked out, rather than the hours they might have spent doing the original calculation themselves.

No control has been taken away and everything can be reviewed by a human.

What you need to know about choosing accounting software

It may be that you have not made full use of automation because you’ve simply lacked the tools – or did not know how much software could do.

If you’re looking to automate tasks, there are a few questions you should consider as you explore your software options.

Is the software too limited? Entry-level applications aimed at small and medium-sized organisations are often basic in their scope. That may be fine when your operation is small, but as you grow, your creaking software won’t be able to automate the range of processes that more sophisticated systems can.

Is it too big and expensive? At the other end of the scale, there are enterprise-level systems, which can automate a lot of tasks. They’re powerful, but there can be drawbacks. If you want to automate a new process, you might have to spend money on development, or have someone write bespoke code or tweak the system.

Can you set things up yourself? If you don’t want to consult a technical expert every time you need to automate a new process, the answer could be software that uses a “modular” system. Think of it as giving you the software equivalent of Lego-style blocks which you can put together to create new automated processes. The process can be simple enough that staff can learn it quickly and use it independently.

And if you’re worried that tinkering with your system sounds risky, find out whether the software has a “sandbox” – an area of the system where you can try things and practice without breaking anything.


When the end of the month isn’t something to dread

If the end of the month causes your team sleepless nights, it may be a sign that not enough automation is going on.

There should not be stressful days spent working out a long list of adjustments and inputting them into the finance system. Finance teams don’t need to be spending two or three days closing things down and tidying up for month-end – and year-end need not be 12 times more stressful still.

Put the right automation in place and your team need not look at the calendar with dread. The end of the month can be just another day.

Finance

Crypto’s tipping point

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Chris George, Senior VP of Product at Somo argues that Crypto needs to improve its scalability to be taken seriously

Cryptocurrencies are no longer the exclusive domain of high risk financiers or tech Bitcoin jockeys, willing to ride a niche and volatile asset for good or ill. Today, neobank and mainstream banking apps alike offer crypto banking, helping them trade in Bitcoin or Ethereum from as little as one dollar(https://www.revolut.com/crypto/).

Indeed, in September 2022, Finbold reported that British citizens had invested nearly £32bn in cryptocurrencies, and additional research from HMRC would have it that one in 10 UK adults has bought crypto, double the number from the previous year. 

But even given the legitimacy lent to crypto by the fact that now 50% of UK banks allow customers to interact with these currencies as well as other digital assets, how can the asset management industry turn it into a significant – and mainstream – asset, particularly in today’s turbulent economic climate? With the collapse of FTX, this must be taken into serious consideration. FTX was sold as being a safe and stable way to trade digital currency, alas this has not been the case. It turns out Sam Bankman-Fried seriously over-promised and dramatically under-delivered, gambling away customer assets and ultimately prioritising fraud and malpractice.

First, we need to acknowledge that not all crypto is created equal. Some, such as Bitcoin or Ethereum, do function as a currency, are limited in volume and therefore can increase and (as 2022 amply showed) decrease in value. But other blockchain-based crypto doesn’t behave like what most people commonly accept as currency at all. 

For there to be significant uptake in crypto as an asset, there is going to have to be a far broader and deeper understanding of what it is and what it can do. As Christophe Diserens, chief compliance officer at SwissBorg has suggested: “Value and useability are going to be key. Metcalfe’s Law has been used to value tech and internet stocks so why not crypto?”. That value took a bit of a beating during the recent sell-off and crypto’s perceived volatility will need to be addressed if it is to achieve scale. Because that’s what it’s going to need if it’s ever going to be considered as a legitimate global payment alternative in the future.

 

The role of The Merge

Not the latest B-movie, sci-fi flick, The Merge in September 2022 saw the world’s second-biggest cryptocurrency, Ethereum, move from a ‘proof of work’ to a ‘proof of stake’ protocol. This was nothing short of seismic. 

Proof of work is how the vast majority of crypto has been mined to date. People solving complex equations to validate transactions (the ‘work’) uses masses of computer processing energy, accounting for a significant slice of the world’s electricity consumption. In today’s climate (in both senses of the word), that’s just not on. 

Proof of stake, on the other hand, relies on far fewer ‘miners’, fewer computers and less energy as a result. This so-called ‘Merge’ is not only expected to reduce worldwide energy consumption by 0.2%, but also boost the crypto economy as a whole, creating more opportunities for investors and allow developers to build more products and applications on Ethereum. Ultimately, it could be what drives the decentralised internet of blockchain, crypto and NFT – Web3 – mainstream. 

What does this mean in the ‘real’ world? This could present a real opportunity for the financial services sector as a whole. It will change the way it operates, speeding up transactions, creating new business models and generally just making the whole thing a more efficient way of working. Fully cashless payments for business would be a real boon, given the costs and potential losses involved in transacting in cash. Digitisation also makes transacting an altogether more intuitive experience. 

One thing crypto and its associated technologies and solutions needs to be wary of is becoming a solution in search of a problem. For a truly mainstream breakthrough, the industry needs to make sure it’s bringing the consumer along on the journey. For end users to be truly confident in crypto, it has to benefit from the same levels of governance and regulation that cover the rest of the financial services industry, building and maintaining consumer confidence will be extremely important as trust levels have been shaken by the recent lack of solid administration and “irresponsible lending practices” leading to the FTX implosion . It has to be simple to transact, but with all the protections that investors have come to expect. It can’t afford to take them on another rollercoaster ride like 2022’s. 

While 50% of the UK’s banks may be getting on board with crypto to some degree, there is still a wide open ocean of opportunity for asset management players to realise value for themselves and their clients. It will involve some reshaping and more investment in digitisation to manage the assets of the future, whatever they may be. 

Somo, part of the CI&T family, will be publishing a report titled ‘Assessing the Crypto Conundrum: Will cryptocurrency ever be a significant trading asset and how can digitalisation shape its future?’ in 2023. 

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Skedadle to change the game for advertising with Currencycloud partnership

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Currencycloud, the experts simplifying business in a multi-currency world, has partnered with Scottish start-up app Skedadle to provide its users an easy, secure and seamless way to transfer money earned in-app while playing games on public transport.

Skedadle rewards travellers for the time they spend playing on-the-go. They can earn £2 per day simply for playing games on the move. That’s an extra £60 in their pocket each month. This can be done thanks to a disruption in the advertising market, by using algorithms to verify and track the users’ engagement with ads, proven to be higher while playing than in traditional online advertising, which increases product and brand recall for advertisers. Thanks to the partnership with Currencycloud, Skedadle users can use the app on public transport and be reassured that all financial transactions and financial data comply with the highest standards of security and validations.

By connecting to Currencycloud’s API technology, Skedadle has been able to integrate in their app a state-of-the-art payments ecosystem that seamlessly bulk settles the money earned from advertisers into a secure account and then processes withdrawals from users fast. At the same time, Currencycloud also sets the infrastructure that will enable them to grow both geographically in the UK and globally, by providing access to 38 currencies and low cost, fast FX rates.

Says Nick Macandrew, CEO and Founder at Skedadle: “Trust and security are crucial, especially when it comes to people’s money. As we rapidly grow our platform, we need a solution that can keep up with our pace and Currencycloud do just that. Our cutting-edge technology requires a secure, stable, and simple way of managing payments, whilst guaranteeing the best user experience possible.”

Nick Cheetham, Chief Revenue Officer at Currencycloud commented: “Backing bold start-ups from day one has always been part of our DNA. Skedadle’s creation of new revenue streams for travellers and advertisers alike is an exciting business endeavour. We are eager to see how the  platform can grow and disrupt the market by integrating our seamless payment capabilities.”

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