Reducing Redundancy: How Cloud Finance Solutions can Help

Redundant financial processes are a problem for organizations.

From time and resources wasted completing the same (or similar) task over and over again to potential cost concerns tied to discrepancies in data entry when processes are repeated, redundancy can significantly impact the ability of companies to streamline and secure financial processes.

Here’s a look at where redundant efforts can cause issues for companies and five ways businesses can reduce task redundancy, from cloud finance to automation to collaboration, without sacrificing accuracy.

The Reality of Redundant Efforts

Redundancy isn’t inherently problematic. For example, redundant security tools can help reduce the risk of compromise — if attackers manage to circumvent one piece of the security perimeter, redundant backups may catch the intrusion before it’s too late. Redundant financial processes may also offer benefits; tools used to double-check data entry or confirm payments before they’re sent out can save companies the time and effort required to fix these mistakes after they’ve occurred.

As the number of necessary financial processes increases exponentially, however, companies must face the reality of these redundant efforts. Three problematic process outcomes include:

Increased costs

Doing a task twice (or more) increases its total cost. Consider an employee entering invoice data provided by suppliers, followed by another staff member double-checking this data, and a third reviewing the information before a PO is generated. If each task takes one hour, the total cost is three hours of employee time. This means two hours’ worth of wages that could have been better spent somewhere else. Multiply this out across hundreds or thousands of processes and costs quickly ramp up.

Wasted time

According to research data from Asana, the average knowledge worker now spends 60% of their time “working about work”. This includes replying to email threads about already-completed tasks or projects, tracking down specific documents, and re-completing tasks that have already been done. All of these efforts add up to wasted time, with just 27% of staff workdays dedicated to their primary job responsibilities.

Reduced employee engagement

Redundant tasks can also impact employee engagement. Recent survey data found that 67% of office staff feel they’re “constantly doing the same tasks over and over again,” and waste more than four hours each week on tasks they believe could be automated or eliminated. In a job market that’s short on talent and long on opportunities for skilled financial staff, reduced employee engagement tied to redundant tasks poses a real risk for organizations.

Five Ways to Reduce Task Redundancy

While there’s no way to completely eliminate redundancy — and doing so would eliminate safeguards in specific operational areas — it is possible to reduce financial task redundancy to limit time wasted, increase work value, and improve employee engagement. Here are five ways to get started.

Pinpoint bottlenecks

Before businesses can reduce process redundancy, they need to pinpoint where problems are occurring. Skipping this step means companies could spend time and money solving the symptoms of redundant processes rather than eliminating their root cause, in turn leading to more time and more spending down the line.

Consider an accounts payable process that relies on the double-checking of physical forms to approve payments. Not only does this require time from two staff members and potentially more effort if discrepancies are found, it also opens the door to lost or stolen documents. Here the bottleneck is the process itself — by digitizing forms with tools such as optical character recognition (OCR), companies can capture accurate data up-front, then bring in a single staff member for review and oversight.

In other cases, issues with missing or incomplete data may be the source of redundant tasks as staff spend time tracking down and entering relevant information to complete key processes.

Automate where possible

Automation can also help limit the risk of redundancy in financial processes. For example, accounts payable automation with Sage Intacct provides real-time access to accounts payable transactions and data along with defined workflows, approvals, and internal controls that align with your business processes. The result? AP processes with fewer steps to achieve the same outcome, coupled with higher overall accuracy.

This automation approach can also be extended to invoicing, accounts receivable (AR), and payroll. By creating a single source of truth for multiple financial processes, it is possible for companies to reduce the time and effort necessary to create, manage, and complete transactions at scale.

Improve communication

Process redundancy is often tied to communication challenges. For example, if capture and enter key data but forget to flag their task as done in existing AP systems, other staff members may look to pick up the slack by completing the task again, in turn creating a feedback loop of poor communication and wasted effort.

To address communication challenges, it’s worth spending on collaboration tools that make it possible for staff to track and update task efforts in real-time. This allows other employees to determine task status at-a-glance, in turn reducing the risk that processes will be repeated for no good reason. Enhanced communication also makes it easier for companies to pinpoint problems and determine root causes.

Track key metrics

Metrics matter. How long are tasks taking? What is the average error rate per task? How many staff members are required to complete specific financial functions? By understanding their current process landscape, companies can consider the best way forward and take targeted action to reach their goals.

Here’s how this could work in practice: First, businesses identify the baseline of current financial operations in terms of time, errors, and cost. Next, they select one (or more) metrics they want to improve, Then, they take action and regularly assess the results to determine if outcomes align with expectations.

Consider an AP team with an average cost per invoice of $25 and a goal of reducing this cost to $20 over a period of 12 months. After selecting and implementing processes to help achieve this aim, such as integrating automated invoice review and digitizing paper documents, teams then track the cost of invoicing each month to determine if new processes are working. While it’s not uncommon to see initial cost upticks as new processes are incorporated into operations after the first few months businesses should notice a steady cost decline. If not, it may be worth considering other approaches.

Implement cloud-based solutions

Cloud finance solutions — such as Sage Intacct — can also help companies reduce their reliance on redundant processes. By shifting services into the cloud businesses can both limit their reliance on costly local hardware that must be regularly maintained and upgraded, and gain access to a single source of financial truth that naturally supports real-time collaboration. The numbers speak for themselves: Sage Intacct customers achieve 250% ROI on average and see a 65% boost in productivity as redundant processes are replaced or eliminated.

Ready to reduce redundancy and streamline financial functions? Start with Sage Intacct.