Every sought-after business today marked the beginning of a new era. PCs transformed how we look at computers.
Every sought-after business today marked the beginning of a new era. PCs transformed how we look at computers. iPhone’s entry into the world challenged the extent of human-tech communication known to mankind at the time. These eras coerced businesses to look at their functions under a different light, especially finance. While technological innovation within the finance industry (investments, trading, etc.) was at its peak, a lot of back-office finance functionalities for fast-growing businesses, including enterprises, were still broken. Furthermore, to increase finance productivity, finance leaders recognised the dire need to automate pre-accounting and pre-compliance.
Pre-accounting, pre-compliance and why they matter
Pre-accounting consists of a wide range of manual activities to make sure accounting happens on time. It's a process that involves the gathering and coding of data into a normalised form for accounting, specifically done by non-accountants. Typically, tasks like creating expense report templates, ensuring timely and compliant submissions by employees, eliminating bottlenecks in the approval process, budget compliance for a category, or department-wise spend, in line with their general ledger practices, etc. fall under pre-accounting.
On the other hand, pre-compliance is ensuring all these expenses adhere to company and regulatory policies. It also encompasses tracking expense leakages or suspicious activity, leading to expense fraud, collecting and categorising physical paper receipts for auditing purposes, and maintaining detailed audit logs.
Businesses are accelerating at a faster pace, and the stagnant, manual process of pre-accounting and pre-compliance hinders their ability to thrive. For instance, to achieve a high sales target, an employee travels excessively to meet up with prospects. While she spends for the company, the onus also lies on her to collect, save, organise, and submit all kinds of receipts. This leads to a rather frustrating experience hampering productivity or causing disharmony within finance due to late submissions, manual errors, or loss of receipts. Hence, instead of continual friction within departments, businesses are now looking to embrace technology to automate their pre-accounting and pre-compliance.
Accounting and compliance are age-old requirements. Over time, technology has helped streamline and democratise the process across a company. Let's take a look at how this has evolved.
The PC era solutions
The PC era saw cloud systems take the lead for bringing manual workflows to the cloud. However, being digital was limited to employees and finance teams filling in the same information, just on a computer. In fact, it turned more tedious because now finance teams had to maintain records in multiple systems that didn’t interact, causing room for expense fraud. For these systems, pre-accounting is dwelling in the past, and therefore, solving pre-compliance is still a far fetched dream. What’s interesting though, is due to sheer legacy; these old-age systems continue to be infamous for addressing the pre-accounting and pre-compliance needs of many organisations today.
The mobile era charm
Legacy systems birthed mobile-first solutions, literally. The mobile-first solutions became the talk of the town for merely being mobile-first. They didn’t change any workflow or solve any friction. They just moved the frustration to a new, handy device, as all problems from the PC era still prevailed. Moreover, many organisations moved to such solutions just to live in the illusion of keeping up with the times. Although it’s not their fault, they just had no choice.
The AI era for today and beyond
Unless you’re living under a rock, it’s hard to miss how AI is solving the world’s biggest challenges. While pre-accounting and pre-compliance tasks are relatively small in the growing list of priorities, it ends up taking a disproportionate time. This is where AI can help. It enables finance professionals to keep up with the times and earn that time back, all this while ensuring a happier employee base. AI-powered solutions guarantee that employees don’t have to think about expenses, and finance teams can now truly automate pre-accounting and pre-compliance.
Here’s a quick glimpse -- most digital receipts directly land in email inboxes today. A simple plugin extracts all the data from receipts, adds them into a customised expense form, checks for compliance with company policies, attaches receipts, and submits the expense report in just a few clicks. All of this without any device limitation, i.e., it works on any phone, tablet, computer, laptop, etc. This is what automated pre-accounting and pre-compliance look like. Simple for the user, comprehensive for the finance teams.
The future of pre-accounting and pre-compliance
Pre-accounting and pre-compliance aren’t going anywhere, but they’re definitely changing with the times. They’ll demand more attention, and cause additional friction if not fixed permanently. The compelling way for companies to tackle these problems is by truly finding an innovative expense management software that understands and addresses the challenges of today.
This article comes courtesy of Fyle, an expense management software built for this generation. Fyle provides control to companies with real-time visibility into spends and drives compliance with an intuitive, premium experience. Their portfolio of features includes corporate card reconciliation, automatic policy checks and auditing, expense approval automation, ACH reimbursements, expense analytics, and more. Fyle is trusted by over 300 businesses spread across 17 countries.