Financial Process Automation Continues to Soar in Popularity

A recent article in the Wall Street Journal, titled “The New Bookkeeper is a Robot,” explored the reasons more and more companies are automating corporate bookkeeping and accounting tasks. This piece, penned by Vipal Monga, caught our eye, primarily because it positions the automation of financial operations as a fairly new trend when this is something DataServ has been doing for clients for more than 20 years.   

The article cited several statistics, the most interesting being that since 2004, the median number of full-time employees in the finance department at big companies has declined 40 percent to about 71 people for every $1 billion of revenue, down from 119, according to Hackett Group, a consulting firm. In addition, the article cites another Hackett survey which states that big companies employ 44 percent fewer full-time information-technology (IT) workers and 20 percent fewer human-resources workers than they did a decade ago because automation has cut the number of employees needed in IT as well. Cutting back-office costs has long been a goal of major corporations, and automation can certainly lead to significant cost savings. Our experience shows that while cost savings can be a major benefit, many of our clients cite increased financial controls and reporting, the ability to grow and scale without adding people, and more meaningful work for their accounts payable staff as equally important reasons to automate.

U.S. companies have outsourced manual, low-skill tasks to countries with cheaper workforces for many years, but even some outsourcing companies are now automating finance tasks, realizing that it is an even more cost-efficient option.

Pilot Travel Centers LLC, Verizon Communications Inc. and GameStop Corp. are the companies the article cites as having reaped huge rewards recently from automation, but our major clients, such as 20th Century Fox and Emerson Process Management, have been benefitting from accounts receivable (AR) and accounts payable (AP) automation for well over a decade.

The only significant disagreement we have with the article concerns its focus on big ERP solution providers as the path to automation success. As several industry articles and our own experience indicate, Software as a Service (SaaS) AP automation solutions can provide these same benefits, many times at a fraction of the cost of an ERP/software-based solution. You can learn more about why SaaS solutions hold significant advantages over software solutions by reading our recent blog post on this topic here.

We can answer any questions you have about using SaaS solutions for AR or AP automation. Send your questions to info@DataServ.com. We are here to help.