UK finance departments have been slow to adopt digital transformation despite acknowledging that manual processes lead to critical errors and payment delays.
Research into UK SME finance and accounting departments has exposed the lack of digital tools currently used, with a stunning 39% still using Excel spreadsheets and manual processes, while just 20% use automated invoice processing. The research of over 200 UK finance and accounts payable professionals also found that 35% have not automated their accounting processes because they use multiple formats for invoices and assumed this meant multiple software systems.
Despite acknowledging the faults of manual accounting processes, such as being too time consuming (43%), which can result in late payments (29%) and even the loss of financial documents in the past (27%), there is still a reluctance to adopt automation.
Issues such as the manual validation of invoices, relying on paper documents being printed and shared across the business for authorisation, result not only in delays but also a risk of errors and loss, especially across multi-site organisations. There was an acceptance that adopting automated accounts payable systems would reduce accounting errors (32%) and improve financial control (30%).
Others recognised the drawbacks of manual processing as an inability to operate efficiently with the shift to remote working (27%) and the reason for making critical human and admin errors (26%).
Post-pandemic, the top priority is adapting to digital transformation (24%), followed by strengthening cyber security practices (20%), emphasised by the move to hybrid working across businesses. However, only 12% of respondents said they would consider reducing use of spreadsheets in the finance department.
The independent research also found that a quarter (25%) of UK finance leaders say it takes their business anywhere between one and seven days to process a supplier invoice. According to government figures there are six million SMEs in the UK, meaning that 1.5 million UK businesses are taking longer than necessary to process supplier invoices.
So, what Automation tools should I consider and for what functions?
Purchase Ledger
Software like Dext will not just save you time in processing your invoices and receipts, it will increase the accuracy of your data. You can set certain supplier rules that mean you don’t have to keep manually inputting the same data again and again, for the same suppliers.
Credit Control
There will always be the need for a manual element in your Credit Control process, but you can use software like Chaser to do a lot of the heavy lifting when it comes to chasing your clients for overdue payments. Chaser allows you the flexibility to create bespoke templates and schedules that would be most effective for you and your clients.
Making payments
Instead of having to log into the bank to make payments, and in some cases, manually inputting the relevant information for each payment you can use Telleroo. Telleroo integrates with your Accounting Software, which allows you to set up payments to suppliers in seconds, and directly using the data from your purchase ledger. This just requires you to make one payment to Telleroo for the total amount. Telleroo can also integrate with your payroll software to make paying wages a breeze.
