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Home > Event > The Business Show Presentation: Streamlining Finance Processes to Power through These Uncertain Times

Streamlining Finance Processes to Power through These Uncertain Times

Streamlining Finance Process through these Uncertain Times

Due to the sharp decline in the global macroeconomic outlook, a lot of startups and SMEs are actively cutting down expenses to extend their runway.

Consequently, many businesses across different sectors β€” including the big names β€” are laying off their employees.

In today’s rising state of inflation, companies need to find a way to survive with less manpower and capital to operate their business.

Saurabh Chauhan presenting at the Businesss Show Singapore
Saurabh Chauhan, our Co-founder and CEO, and the audience of The Business Show Singapore 2022

Saurabh Chauhan, our founder and CEO, will present the strategies toΒ streamline finance process to power through these uncertain times.

Table of Contents

Why cutting costs is becoming more and more crucial for startups and SMEs?

Recently, the tech winter – signaled by the lowering rates of funding capital – has hit startups across all levels. Founders are now faced with the challenges to change their mindset, plan ahead, and make sure their company survives, as quoted from the Y Combinator’s letter.

Number of funding rounds
Source: TechInAsia

ASEAN companies, in specific, are lacking in innovation and technologydevelopment and competitiveness, and access to financeThese challenges, however, are easier said than done. 

Challenges experienced by SMEs
Source: Ifac.org

Technological and human resources are costly to acquire. Moreover, as the impact of the funding winter, a lot of companies might not have sufficient capital to optimize themselves in those domains.Β 

But, there’s one solution that can help companies achieve their goals without disrupting their current processes. Keep on reading to find out.Β 

Why should you consider automating your finance operations?

A lot of finance functions across companies spend time on tasks that add the least amount of value, such as transactional processes.

However, high-value tasks such as strategic finance, namely working cross-functionally with teams across different departments to strategize their and the overall company growth, receive the least amount of attention.

Inverted finance pyramid

The reasons?

1. Invoicing is not straightforward, even if done on an accounting software

High-level data points from prove that:

Companies have to chase US$300,000 in late payments, impacting their cash flow and working capital needs, and a total of 72 work days doing manual collections, invoicing, payment reconciliation, month-end closing, and such.

Why does this happen?

On the surface, the AR process looks simple. But, invoicing involves a lot of subcomponents that cause the whole process to be challenging to manage β€” even with the help of an accounting software.

Each customer has different invoicing requirements, data points, and formats. These tasks can be highly complex, especially for companies that have to issue hundreds of invoices monthly.

As a result, account managers spend most of their time chasing collections instead of generating revenue. Afterward, finance officers need to reconcile the data, but matching the payment proofs against the customer is another problem.

Moreover, companies still keep track of their financial performance through manual spreadsheets, which is time-consuming to maintain regularly and eventually does not give the team sufficient insights.

The complex process of AR

πŸ“– Also read: How to Future-proof your Finance Functions (Panel Discussion at the Accounting and Finance Show Singapore 2022)

2. Billing and payment processes are complex and difficult to manage

Manual accounts payable costs US$3.00Β per bill processing, which then spreads out to hundreds to thousands of invoices getting stuck and a total of 52 work days.

Likewise, the accounts payable process might look simple at first. Turned out, vendor or reimbursement payment process is lengthy, tedious, and most of all, time-consuming to manage.

First, the procurement team has to create a purchase request. Then, the accountant has to seek approvals and send notifications to approvers one by one, and the internal team needs to wait for the vendor to send an invoice.

Payments are also difficult to manage. The treasury team or sometimes the CFO, depending on the nature of the business, has to open another platform to proceed with payments and manually key in the transactions.Β 

The complex process of vendor payouts and reimbursements

How to automate AR and AP without disrupting your entire finance process?

Improve existing finance functions

Putting automation in place can be a viable solution without ripping apart the current processes. 

Automation helps your finance operations to connect seamlessly to a single source of truth by extracting the relevant information to the company.  

Peakflo integrations

Involve users to build custom workflows based on an escalation matrix

  • For Accounts Receivable:Β users can create invoicing, collection, and payment reconciliation rules. The system will instantly send the data back to the accounting software to slip into month-end closing.
Automated accounts receivable workflows
  • For Accounts Payable: users can enable custom approval workflows for all the vendor invoices coming in, forward to the OCR (optical character recognition) mailbox, then send the data to the approvers and then back to the system.Β Β 
Peakflo's bill payment approval workflow

The results? Manual processes reduced, and lots of money and time saved. πŸ“ˆ

Saurabh Chauhan, CEO and Co-founder of Peakflo, explaining the costs of inefficient AR and AP
Saurabh Chauhan, our founder and CEO, explaining about an example of successful case study of a Peakflo user

For more details, take a look at how the following companies, from a small finance team to a large enterprise, save their time and money with automation:Β 

Key Takeaways πŸ”‘

  • Manual accounts receivable and payable processes are ineffective; costing money and time.
  • Onboarding an automated system will help save money and time, ensuring business growth even during the toughest times. πŸš€
Interested to know more?
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