Financial controllers are now playing a more strategic role – moving beyond daily operational tasks to actively drive data analysis and strategic planning alongside key decision makers. However, these expanded responsibilities require balancing both short term management and long term strategy, adding complexity to their roles.
With increased expectations, inefficiencies in processes and technology, once manageable, now demand immediate resolution. Automation offers a solution, enabling smoother capture, collation, and analysis of crucial financial data. This article explores the primary challenges faced by financial controllers and highlights how automation, especially in accounts receivable (A/R) processes, can effectively address these issues.
The financial controller, typically a senior manager in the accounting department, oversees an organization’s day today financial operations—accounts receivable, accounts payable, general ledger, and inventory accounting. This role is more common in medium to large companies, as smaller businesses may rely on CFOs to manage these functions.
The specific duties of a financial controller vary based on business size, industry, and other factors but commonly include:
- Setting accounting policies and processes
- Managing the finance team
- Leading cost saving initiatives
- Advising stakeholders
- Creating budgets and approving invoices
- Balancing cash flow and processing payroll
- Ensuring regulatory compliance
- Developing risk management strategies
- Preparing financial statements and overseeing tax filings
Challenges Controllers Face:
Controllers encounter challenges in managing multiple areas. Among the top issues are:
- Stale Data: Accurate reporting takes time, yet real-time insights are crucial for timely decisions. Outdated or inaccurate data can lead to misguided choices. Reports shared across departments must be both comprehensive and contextually relevant.
- Budget Deviations: Forecasting often includes uncertainty. Data-driven forecasting, especially for accounts receivable, can help improve accuracy by turning historical data into actionable insights.
Fraud, Theft, and Other Risks:
Wherever money is involved, there's always a risk of exploitation. Financial controllers play a crucial role in identifying and managing vulnerabilities within financial processes to prevent fraud and theft. Through establishing strong controls, implementing regular audits, and leveraging technology for real-time monitoring, controllers help protect the organization’s assets and maintain financial integrity.
Errors in Data Handling
Accuracy is paramount in business. Manual data entry by accounting teams introduces a high risk of error, often leading to costly and time-consuming corrections. Mistakes, such as incorrect billing or payment details, not only waste labor but can also damage client trust and impact cash flow if unaddressed.
Cash Flow Issues
Delayed or inaccurate invoices prolong payment cycles, disrupting cash flow and limiting flexibility. Unpredictable income streams make it harder to seize new opportunities or respond to market changes swiftly.
How AR Automation Supports Financial Controllers
Automation of accounts receivable (A/R) processes offers solutions to many common controller challenges. By leveraging a robust automation platform like our Accounts Receivable Automation software, controllers can streamline operations, enhance data control, and better adapt to evolving financial needs.
Benefits of A/R Automation:
- Accurate, Customizable Reporting: Automation platforms often include reporting tools that consolidate real-time data, providing both high-level and detailed insights into A/R metrics, collections, payments, and sales by business unit.
- Advanced Reporting Capabilities: With our Advanced Reporting addon, controllers can generate tailored reports and dashboards, built from numerous fields and objects, or even write custom queries for deeper analysis.
- Enhanced Compliance and Confidence: Access to accurate, real-time data simplifies compliance efforts, ensuring that reports reliably reflect the true financial state of the business.
- Data-driven Forecasting
Accurate, continuous reporting allows financial controllers and decisionmakers to track historical performance and recognize trends influenced by various factors. While not all patterns are predictable, basing decisions on past market, business, and financial behaviors helps improve budget and planning accuracy.
To maximize insights from historical data, consider using analytics software or built-in planning tools within your automation solution. For instance, the Inebura platform provides high accuracy forecasts of payment timelines, enabling better cash flow predictions and overall financial planning.
- Financial Security
Our Accounts Receivable Automation software streamlines workflows, significantly reducing the manual effort involved in preparing, managing, and collecting invoices. By minimizing the number of touches in the procure to pay process, the risk of fraud is reduced—fewer hands on a payment mean a lower chance of misappropriation.
With robust permission controls, you can restrict access to financial data, while audit trails provide transparency into who is involved in each invoice or payment approval. This visibility is crucial for mitigating fraud within your organization.
- Error Reduction Through Technical Precision
Automated processes enhance accuracy by integrating seamlessly with various systems, leading to fewer errors in invoices and payment records. Our platform supports multiple third party software, including accounting, ERP, and sales management tools, allowing you to pull accurate data directly from the source instead of manually rekeying it.
Additionally, we offer an API for the Inebura platform, enabling you to integrate our tool with your existing operations. This simplifies the management of invoicing, payment processes, subscription billing, and more.
Moreover, we harness the power of AI to ensure payments are accurately processed. Our proprietary Cash Match ,AI algorithm automatically identifies and applies remittance advice, effectively handling complex payment scenarios like short payments, overpayments, and advanced payments.
- Accelerated Payments
Our Accounts Receivable Automation software streamlines centralized workflows to eliminate delays in the invoice review and approval process, handling validation and routing efficiently.
By speeding up the delivery of invoices to customers, we enhance cash flow. Our Smart Chasing feature automates dunning communications across multiple channels—email, phone, text, and more—keeping payment reminders at the forefront for customers. Additionally, our software supports early payment discounts and tailored credit terms, further incentivizing prompt and consistent payments.
We also offer a self-service payment portal, allowing customers to manage their payments seamlessly. Users can schedule future transactions, update payment information, verify invoices, raise disputes, and download receipts all from one interface. The Auto Pay function further simplifies the process, ensuring invoices are paid automatically without requiring customers to remember to make payments.
Inebura: Automation for Today's and Tomorrow's A/R Challenges
While automation addresses some of the challenges faced by financial controllers, it is not a cure all. However, implementing the right strategy with the right technology can lead to significant process improvements and real time data integration, enhancing your planning success.
Though other tools may offer similar features, our proven Accounts Receivable Automation solution delivers comprehensive benefits and more. Schedule a demo today to discover how it can optimize both your short- and long-term financial operations – sandeep@inebura.com