Automated systems have drastically impacted how finance teams operate. Well-programmed bots can handle everything from basic customer service to automated financial modeling. Is it the right tool to help you improve the performance of your FP&A operations? Learn more about finance automation tools before making a decision.
What Are F&PA Teams?
Work titles vary across companies, so to ensure we are on the same page, let’s begin by identifying who your F&PA professionals are. FP&A workers handle the forecasting, planning and analysis of your company’s financial future. This group uses data to make recommendations for allocating resources and plan for growth.
How Can You Use Automation?
F&PA tools can take many different forms. These, in turn, affect how you use them and the benefits they offer. With these variations in mind, here are some ways to leverage the power of automation for your FP&A team:
- Streamlining data entry and report generation
- Building and maintaining financial models
- Forecasting and budgeting
- Analyzing trends and performing what-if analyses
Should You Use FP&A Automation Tools?
Now that you know more about FP&A automation tools, it’s time to ask yourself if they are the right fit for your team. Here are some factors to consider before you make a final decision:
- The size of your FP&A team
- The complexity of your financial forecasting and planning needs
- Your company’s budget
- Your timeline for implementing an automated FP&A solution
As you can see, there is no one-size-fits-all solution. The best way to determine if FP&A tools are right for you is to consult with your IT team and FP&A experts.
The Benefits of FP&A Automation
Ultimately, the benefits of automation will serve as its selling points. In fact, you might need this information to convince shareholders, managers, and everyday workers of the value of automation. Start with these benefits.
Improved accuracy and efficiency
FP&A teams that use automation tend to report increased accuracy in forecasting and planning. Bots don’t get tired and make mistakes the way humans do. They also free up your team’s time to focus on more strategic tasks.
Better decision making
FP&A automation tools give you access to real-time data and insights. This data, in turn, allows you to make better decisions about your company’s finances. In some cases, companies automate decisions, such as automated credit decisions for online applications and automated clearinghouses.
Increased transparency
Automated FP&A systems create a paper trail that is easy to follow and understand. This level of transparency is valuable for both managers and employees. It can also do wonders for ensuring compliance.
How Do You Integrate Automation Into Your Business Model?
When you’re ready to take the plunge, there are a few things you need to do to ensure a smooth transition. By following these steps, you can successfully integrate FP&A automation into your business model:
- Make an informed decision about the right FP&A tool for your needs. This might require some research, as well as trial and error. Once you find a solution that works for you, it’s time to implement it across your organization.
- Train your team on how to use the new system. Your workers should feel comfortable using it before going live with the automation tools.
- Don’t forget to monitor your FP&A team’s performance after implementing the automation tools. Doing this will help you identify any areas where they need improvement.
The Challenges of Automating the Forecasting Process
Automation brings its fair share of benefits to the forecasting table, but it does have some challenges. Knowing what these are ahead of time can make it easier for your team to create contingencies ahead of implementation.
Resistance From the FP&A Team
Workers often look askance at automation because they believe companies wish to replace them with bots. As a result, you might need to do some extra work to get your FP&A team on board with the idea. Show them how AI complements rather than replaces them.
One way to overcome this challenge is by ensuring that your team understands how automation will help them in their day-to-day tasks. You should also provide training on the new system and give them time to adjust to the change.
The Cost of FP&A Automation Tools
While FP&A automation can offer many benefits, it’s important to remember that these tools come at a cost. Before you make a final decision, be sure to factor in the price of the software and any associated implementation costs.
Scaling operations up and down can also affect costs. Keep this in mind when determining the right fit for your business operations.
Limited Customization Options
FP&A automation tools streamline the forecasting process. However, the focus on simplification could make it difficult to include some steps necessary for your business operations.
If you find that an FP&A tool doesn’t quite fit your needs, you might need to look into customizing or even replacing it. This can be a time-consuming and expensive process.
The Bottom Line
If you’re looking for ways to improve the performance of your FP&A team, consider using automation tools. With their help, you can streamline data entry, build financial models, forecast budgets, and analyze trends—all to make better decisions.
While it does have some challenges, FP&A automation has proven to be a worthwhile investment. By taking the time to do your research and plan for potential roadblocks, you can set your team up for success. In the end, that’s what really matters.
