Investing in the digitization of your finance team is a great way to boost the efficiency and growth of your small business. Thanks to machine learning, artificial intelligence, the cloud, and other technological advances in recent years, digitization is now a realistic goal.
In fact, the McKinsey Global Institute estimates that today 40 percent of finance activities can be fully automated. Also, another 17 percent can be mostly automated. This represents an opportunity for small- and medium-sized businesses to streamline operations. This is more important than ever with the onset of COVID-19 and the realities of virtual work.
If you’re a small business, it’s time to consider these three ways that going digital can lead to meaningful growth.
1. Streamline your overall operations
For years, finance departments have been tied to practices that happen in offices. They have primarily relied on manual operations, including paper checks and hard copy payment processes. By transitioning to a digital payments system in a business world shifting to virtual operations, your team can process payments more quickly and accurately.
According to the American Express One AP Survey, 82 percent of businesses surveyed believe it would be helpful to switch from paper to automated digital payments.
This means that your in-office and virtual employees will benefit from more time to focus on other aspects of your business that may be underserved or even overlooked. Additionally, they could get a morale boost upon letting go of monotonous tasks. In fact, according to the American Express One AP Survey, 82 percent of businesses surveyed believe it would be helpful to switch from paper to automated digital payments. Then, 68 percent cited efficiency and time savings as an advantage.
2. Empower your finance team to think big
Your finance department houses a lot of critical data and is capable of far more than looking at accounting reports and getting your company ready for tax season. Digitizing your finance function can empower your team to look beyond the simple numbers at operational data.
Your finance team can become a true advisory arm of your company in a few ways:
- Informing important business decisions all year round
- Creating business solutions
- Helping drive your overall business agenda
For example, your finance team might create a dashboard analyzing your inventory and supply chain that improves key areas of the business, such as cash flow and customer service. Or they might establish employee payroll metrics to objectively compare employee performance. They might also create forecasts and projections for various revenue streams and expense lines based on actual cross-functional data.
By freeing up your team’s time and equipping them with powerful digital tools, they can become strategy-focused stakeholders who arrive at unique insights that improve your bottom line and move your business forward.
3. Prepare for future disruptions
Even when you think your business is in a good place, be careful. The COVID-19 pandemic has taught us that the future is unknowable. Small- and medium-sized companies must be agile and responsive.
Adopting a digital payment system is an effective way to do just that by:
- Helping you better navigate the economic realities of the current pandemic
- Set you up for success while in a position to adapt or pivot in the future
The evidence is in the numbers like in the American Express One AP survey. Thirty-five percent of respondents say the impact of COVID-19 has made them consider changing how they process payments. Furthermore, as these technologies become the industry standard, your business will need to be ready for the future.
Of course, digital transformation will not happen all at once. Companies should not use their legacy systems and processes as excuses not to get started. Change is always hard, but smart businesses need to embrace digitization or risk falling behind.
Kendra James-Anderson is an American Express ambassador and the founder and owner of The Finance Femme, a unique financial consulting firm that provides Virtual CFO services & high quality accounting support for small businesses. Kendra integrates her corporate experience, extensive entrepreneurial knowledge, and business finance & strategy skills to help busy & successful businesswomen run their businesses with the confidence of having a full-time CFO. Kendra also coaches and mentors other women in the Accounting, Finance & Tax industry - helping them build premium businesses & brands and stand apart from the rest.
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