Automating vs hiring for financial processes

As your operations grow, so will the complexity of your finance processes. Eventually, you might reach a point where your finance team just doesn’t have the resources to manage the growing workload. That’s when you need to figure out whether you need more people or automate part of the work. Let’s look into when you should consider increasing your headcount and when it’s time to give some of the finance team’s work to automation tools.

Why automate financial processes?

Even highly skilled finance professionals make mistakes when doing repetitive tasks hundreds of times a day. And if you only rely on manual work, you will need to keep increasing your headcount as your operations grow. In contrast, automated processes scale without you having to make significant changes.

Here are some ways you can benefit from automating your finance work:

• Efficiency: Automation significantly reduces time spent on mundane activities like data entry, and lets finance teams handle the high-impact work.
• Accuracy: Automated systems minimize mistakes in financial data by removing human error.
• Real-time visibility: Automated reporting provides up-to-date insights into the company's performance.
• Risk management: Automated controls and audit trails improve fraud prevention and compliance.
• Scalability: Systems easily scale to accommodate growth in transaction volumes and complexity.
• Cost savings: Automation reduces labor costs and unexpected expenses caused by manual errors.
• Standardization: Automation ensures that the financial processes are consistent across all your teams and entities.
• Business continuity: Automating some critical tasks ensures that work gets done even if half the finance team is on vacation.

What should you automate?

If you decide to start automating your finance flows, consider the high-impact tasks first. High-volume, repetitive financial tasks like invoicing, reconciliation, and data entry share a critical characteristic – they follow consistent, rule-based patterns that require precision but minimal judgment. This makes them ideal candidates for automation and problematic when handled manually. Let's look at a few examples of financial processes that can save you a lot of manual work when automated.

Accounting operations

• Accounts payable: Optical character recognition and natural language processing extract key details from invoices and match them to purchase orders. Approvals are automated based on custom rules.
• General ledger: Journals and ledgers are automatically updated in real-time, minimizing month-end closing efforts.
• Payment reconciliation: Automated transaction reconciliation, from data ingestion and standardization with the help of LLMs, and AI-based tools for transaction matching.

Financial planning and analysis

• Budgeting: Templates and collaborative workflows streamline data collection from business units and automate budget consolidation.
• Reporting and dashboards: Custom reports and interactive dashboards provide real-time analytics into all aspects of financial performance.
• Profitability analysis: By integrating revenue and cost data across business lines, automated tools provide granular profitability analysis.

Treasury management

• Cash flow forecasting: Advanced algorithms accurately predict future cash positions based on invoices, payments, and expense schedules.
• Cash management: Machine learning matches cash supply with anticipated needs, optimizing liquidity while minimizing borrowing costs.
• Risk management: Automated risk analysis across multiple dimensions, including currencies, interest rates, counterparties, etc., minimizes market volatility risks.

When to consider hiring more people?

Despite automation's advantages, certain financial processes still demand human judgment, strategic thinking, and contextual understanding that technology can't replicate. Financial processes involving significant ambiguity or new situations are poor automation candidates. When you need to evaluate a new revenue recognition scenario under complex accounting standards or determine the appropriate tax treatment for an unprecedented business arrangement, you have to interpret regulations, consider precedent, and apply professional judgment.

Edge cases and exceptions are where automation reaches its limits and human intervention becomes critical. A payment reconciliation system might automatically match 95% of transactions, but that remaining 5% (partial refunds, currency conversion discrepancies, timing mismatches between PSPs, or transactions split across multiple invoices) requires investigative work.

Similarly, when automated fraud detection flags a high-value transaction as suspicious, a human must evaluate whether it's genuine business activity or actual fraud by considering customer history, business patterns, and communication context that algorithms can't fully capture.

If these tasks take up all of your team’s time, and you’ve already automated other tasks, it might be time to grow your team.

Reiterate will help you automate the most high-effort manual tasks

When companies delay automation too long, they hit a scaling ceiling where growth becomes increasingly more expensive. Each new market, product line, or payment channel requires proportional headcount increases that strain the budget.

So when you decide to go the automation route, Reiterate workflows will help eliminate manual tasks like reconciliation, pre-accounting and data collection, and financial close and compliance. The workflows will scale with your operations and free up your team's time to focus on more strategic tasks.

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