If you Are going to invest in electronic workflow, then ensure the new system has robust controls to eliminate financial risks and improve the quality and accuracy of financial information.
Financial software packages are now offering electronic forms and workflows to assist organisations. However, other larger entities are choosing to invest in an external workflow system that can capture all business processes beyond the finance department.
Popular financial processes to automate through electronic workflow include:
- Payroll processes such as timesheets and leave forms
- Accounts Payable for purchase orders and creditor invoice entry
- Accounts Receivable for receipting, debtor management and invoicing
If you are considering electronic workflow, then do not just put current forms and processes in an electronic format. Take the opportunity to find a solution that will improve business management by tightening controls and creating accountability and transparency for all users.
To put it simply, taking a paper form and making it electronic will only solve half of your problems.
The Paper Reduction Myth
Having electronic forms and documents does not necessarily reduce paper usage in organisations. Quite often, electronic documents end up being printed so they can be actioned, signed and filed.
An electronic workflow solution must provide an end-to-end solution from user to storage. This requires investigating and understanding how information is gathered, actioned and stored within an organisation.
Electronic forms and documents should carry electronic audit trails to track who did what and when.
Electronic Policy Enforcement
Taking a standard corporate form and making it electronic does not address policy compliance issues or minimize business risk.
For example, let's look at a simple process of an employee calling in sick to work. A standard corporate policy is that the employee is required to complete a hard-copy leave form when they return to work from their sick leave.
- What if the employee is unaware of the policy, and therefore doesn't know that they have to complete a leave form?
- If the employee does not follow the policy and fails to complete a leave form, will non-compliance be detected?
The financial risk to the organisation due to a staff member not adhering to corporate policy is that the sick leave will not be recorded. For larger organisations, the dollar value of this type of risk can be significant.
Having an electronic leave form will not address any of the policy compliance issues. These are the sorts of simple processes that actually require sophisticated and thought out solutions that will increase controls, enforce compliance and reduce risk to organisations.
This is the difference between electronic forms and using electronic workflow for financial process improvement.
A Shiny New Toy Vs. Improved Business Processes
Investing in new technology is a big business decision, and like any investment it must better your organisation by either reducing costs or increasing output.
- What are the most time consuming non value adding tasks that drain resources?
- Where are the biggest areas of financial risks that need to be addressed?
- What corporate policies have the greatest rate of non compliance?
Remember that any upgrade of business or financial processes must be adhered to by all members of the organisation. To help with implementation, you cannot underestimate the importance of user interfaces, effective training and understanding the technology skills of the users that will be operating the system.
A system upgrade requires 100% commitment from the entire organisation or it's worthless.
Why Get a Management Accountant Involved?
At Precision, we have experience and expertise in mapping financial information flows that enable us to identify holes in current processes that expose organisations to financial risk.
We understand the importance of robust internal controls that meet audit requirements but also deliver high quality and accurate financial data.
Although our solutions keep the bigger picture in mind, we never forget who the actual users of the system solutions are. Our aim is to work smarter, not harder so our solutions deliver real results for all users.
Engaging specialist skills for reviewing financial processes can be the difference between building simple electronic forms and delivering a powerful financial process improvement solution.
Are you interested in how electronic workflows can be used in your organisation?
Contact Precision Management Accounting for a no obligation chat about your options.