Cloud services are an effective way can deliver more than just capital expenditure reduction and improved efficiencies. It can help to support a company's effective management and control of reporting and deliver better levels of transparency.
Company director responsibility is widespread and failure to carry these out can lead to fines, personal liability for company losses and, in the most extreme cases, imprisonment.
As well as the duty to report on financial results on a regular basis, new legislation means that the responsibilities on directors grows all the time. As recently as April, new directives issued by the European Union placed additional responsibilities on directors of some 6000 companies with more than 500 employees, whilst the 2006 Companies Act is regularly revised following legal cases, often adding further obligations for directors. There is little doubt that the responsibilities for organisations to monitor, manage and report on various aspects of their business activities will continue to grow in the future.
The role of cloud
Using cloud servicesan deliver more than just capital expenditure reduction and improved efficiencies. It can help to support a company's effective management and control of reporting and deliver better levels of transparency.
Business documents are important. They catalogue activities, actions, costs and prices. Businesses receive documents in many different ways: by post; hand delivered (for example delivery notes); through email; via electronic transfers.
Each item is important in its own right, but also adds up to an audit trail for transactions that will be needed as evidence for reporting. Yet managing this information is complex. Documents go missing, information is copied and distributed, misfiled and lost. The sheer cost of managing, storing and retrieving documentation for financial reporting can be significant.
Businesses do not need to operate in this way. And one of the significant opportunities afforded by cloud-based back office automation is a clear and easy to access audit trail for business. Using back office automation software, documentation arriving at a business can be scanned (if in a paper format) or digitally filed (for non-paper documentation) into a businesses' enterprise resource planning (ERP) system or finance software (if relevant). Smart ERP systems will enable users to add relevant tags to documents so that they can be retrieved simply and effectively whenever required.
Smart data extraction and storage
The most effective solutions extract data from these documents automatically, understanding the difference between (for example) text that is an address or company name and a purchase order number. By extracting this information and automatically applying it into the ERP or finance software, businesses can begin to automatically match, for example, invoices to purchase order and delivery notes. Where all of the relevant documents are available and the information matches, the software can process invoices for payment and securely store the information together in the cloud.
There are obvious business efficiency benefits from this. All documents are securely stored and the vast majority of information processing takes place automatically, reducing the cost of business processes significantly and saving staff from doing mundane tasks day after day.
As much as 90% of invoice processing, for example, can be done manually. For businesses that rely on the completion of forms (like insurance companies, health providers or banks) the deluge of daily incoming data is processed automatically not manually, saving considerable time and money.
Cloud driving transparency
Where back office automation really pays is in the smart indexing of documents together. For the finance department this would mean that the purchase order, invoice and good received paperwork are all simply accessible in moments from the cloud. For an insurance company, it means that the numerous documents associated with every claim are all securely stored together and available to view online from anywhere.
The customer service implications of this alone are significant – vastly reducing time to respond to customers. But consider a disputed claim, where the Ombudsman was involved. In this case a clear paper trail of information can be accessed and shared quickly and easily, rather than a frantic search to find relevant information scattered across different filing systems and branch offices.
And when it comes to the dreaded annual audit, information is available to auditors or tax authorities simply and effectively, saving time and money and reducing the impact of an audit on the businesses smooth running.
This is important because regulation on business is only going to increase. Responsibility for transparency is coming out of the Corporate Social Responsibility department and into the boardroom – and rightly so with directors becoming more and more personally responsible for their business actions. Cloud efficiencies run beyond cutting costs and improving efficiencies. Using the cloud to power back office automation can drive a more effective company governance programme, improve reporting and reduce business risk.
- Simon Shorthose is Managing Director of Readsoft UK. Readsoft is a leading provider of business automation services for back office processes.