As companies look to scale and grow their businesses organically or through an M&A strategy, new people, processes and increased reconciliation volume can significantly burden their finance teams. As a result, many organizations are turning to financial close automation software to reduce manual processes and improve their financial data's overall visibility and accuracy.
Big wins through automation
Leveraging technology to automate tedious manual tasks creates opportunities to scale and grow your business without adding headcount. Automation frees up valuable time so your finance team can focus on higher value-added analytics and the strategic work essential in evaluating growth, investment opportunities and risk. CFOs and Controllers should be thinking about how advanced technologies like Robotic Process Automation (RPA), Artificial Intelligence (AI) and Machine Learning (ML) can drive value and facilitate growth.
For most CFOs, increasing labor efficiency and reducing costs is crucial when it comes to the benefits of automating business processes. RPA, for example, has been shown to reduce manual processing costs by up to 80% while decreasing human error and allowing for 24/7 operations with no downtime.[1] While RPA is an easy win for CFOs, end-to-end automation, using more holistic solutions, is rapidly becoming the norm. In a recent study of automation adoption, Gartner predicts that by 2022, 65% of organizations that deployed RPA will also introduce AI, including ML, and Natural Language Processing (NLP) algorithms.
The ROI of automation is super-charged for rapidly growing companies
Enabling an aggressive M&A strategy at LKQ Corporation
The long-run value of automation is super-charged when companies are on a high growth trajectory and need to scale their business processes. For example, LKQ Corporation, a large international auto parts manufacturer based in the US, was able to leverage Cadency® by Trintech to automate its financial close process during a period of rapid growth.
Initially, the company had between 50 and 60 accountants operating within separate business units and financial close schedules. LKQ managed their close tasks across 25 separate Excel spreadsheets without a consolidated way to verify completed reconciliations. In addition, audit review evidence was maintained within Excel and emails.
For LKQ, the situation became hypercritical when it implemented its aggressive M&A strategy. The company recognized it needed to automate or face significant increases in manual processing costs. In preparation, in 2010, the company consolidated five accounting centers into a financial shared service center and implemented Cadency® to automate its high-volume transactions, balance sheet reconciliations and close management processes.
"Today, we are loading about 100,000+ records and auto-reconcile over 90% of those intercompany reconciliations, which has been a significant win for us," said Janice Dailey, Accounting Senior II, Financial Systems Support at LKQ.[2]
With 129 completed acquisitions and revenue growth of 3,711%, Cadency® has allowed LKQ to keep a flat headcount at their shared service center and reduced their financial close process by two days.
Torchy's Tacos eliminates manual processes and provides stronger controls to support an aggressive 5-year growth plan
Torchy's Tacos, a rapidly growing restaurant chain with over 90 stores in the US, needed a financial close automation solution that would help them expand their footprint. They needed a system that would automatically pull their bank records and match transactions one to one. They also needed a solution that could provide them with better controls and have the capability to integrate with multiple systems to pull and transfer data, including integration with their new ERP, NetSuite®.
The company chose Adra® by Trintech to eliminate the manual and inefficient processes they were using across all stores. "Prior to implementing Adra®, we would manually pull our bank statements daily, upload them into an Excel spreadsheet and then we would manually check our daily sales and compare that to what was in the bank," said Shelly Traylor, Sr. Treasury Analyst at Torchy's Tacos. "We were 100% manual using spreadsheets, every day, every month, for every store."
Today, the company is running 20,000 transactions monthly through Adra®. "We are no longer spending time manually matching accounts because we now let Adra® do the matching automatically so we can spend our valuable time focused on the exceptions," Traylor comments. The company has also seen a huge return in the overall accuracy of its numbers. "Adra® helps ensure that our work is accurate and in turn reduces the risk that we previously had with a highly manual process," she concludes.
For CFOs to effectively scale their accounting processes without the added cost, they need to turn to automation. In addition to cost savings, by automating the financial close process, companies can reduce errors, reduce the time to close and free up valuable staff resources to focus on higher value-added work.
To help your finance organization realize its full potential and support your growing business, get in touch with Trintech's industry experts. Whether you are a large enterprise or a mid-market organization, they will help you find the right solution for your specific needs.
