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How Automation Helps Small Businesses Meet Financial Challenges as They Grow

Posted on October 17th, 2022
Automation Helps Small Businesses

As a small business owner, you’re probably aware of how vital workflow automation can be to your company. It reduces time and energy spent on repetitive tasks, which helps free up space for more meaningful work.

Yet implementing new workflows and systems is not cheap. It costs time, employee attention and effort, and money—sometimes lots of money. When you use it properly, of course, good workflow automation should save your company in all of those areas. But, it requires a substantial investment to get there.

Evan Goldberg has a better grasp of these costs and risks than most. He’s the Founder and Executive Vice President of Oracle NetSuite. The company provides integrated cloud-based business software for financial, inventory, and customer relationship management (among other things). So, he’s seen directly how clients at every stage of the business lifecycle struggle with putting the right automation to work.

Yet, as Goldberg points out, to some degree, it’s not as easy to automate now because there are constant shocks that take place in the economy as well as in the market in general. Yet companies want and need more productive employees with adequate time and space to focus on more meaningful strategic work if they want to raise employee engagement and retention rates.

That can start as early as the company’s launch.

Lean startups: Just make it work

For brand-new companies that haven’t yet raised significant capital and are operating on shoestring budgets, and may not even yet know the full extent of their workflow needs. Automation is a matter of getting the task completed. There’s a specific learning curve as a company launches and begins to find its footing, as team members explore various procedures and approaches, learning both what works and what works more efficiently.

A company’s early days are also where data and personal touchpoints are identified. When your team can somewhat fully outline duplicate effort and a subsequent need for information that’s already entered your workflow processes once, that’s a good time to start thinking about how to weave together the elements of your systems in service of the objectives you want those systems to help you accomplish.

That’s especially true for financial systems and processes, Goldberg says. “There’s a vast chasm between startups or very small companies that run on small business accounting packages and spreadsheets [as] their IT environment and giant companies that run on massive enterprise systems. That covers an extremely wide swath of the economy.” The needs may be somewhat similar, but the resources and the scale can be wildly divergent.

That’s why cost-cutting and cobbled-together solutions prevail at this stage. Of course, there may be a higher degree of repetition and duplicated effort, but that might be the price you’ll need to pay to keep costs low and your organizational response reasonably nimble.

Growing up means seriously investing in automation

As the company grows, so do its needs and its resources. Here’s where scalability becomes a more critical factor as teams expand and organizational memory begins to falter. There’s only so much your AP department can remember, for example. If your company winds up entering invoice information three separate times, in three separate systems, then something valuable is being lost to attrition along the way: not just time, but opportunity.

After all, if your employees interact with the same data point multiple times, for every invoice that gets processed, that’s time they’re losing for more meaningful, strategic, and creative tasks that can help the company grow.

Automation’s value at this stage is about laying the foundations for capturing and processing information that needs to be worked with without wasting unnecessary effort or time for your human resources. That’s where automation shines: working with, storing, and recalling data across the company’s financial and other systems, freeing up employee time for the kinds of tasks that software just can’t do (yet).

Playing at a higher level

Once you’re past the early years and the growing pains, your company has to think about a supply chain process that’s increasingly complex and hard to manage, even for small businesses. That’s especially true in the current economic climate that’s been so heavily impacted by pandemic shortages, inflation, and possibly even recession.

Goldberg says this makes automation even more complex as companies realize they need multiple suppliers and more complicated systems. “Smaller companies have definitely become way more complicated,” he says. “They want to go global much more quickly than they ever did before. So these complexities are happening earlier in a company’s life cycle.”

However, automation also helps free up human capital for more interesting, complex work at this stage. Despite the complexities and challenges inherent in automation for corporate players in today’s increasingly global market, the rewards are substantial. Yet to get to those rewards, company leaders must want to invest sufficient effort in pinpointing the systems that genuinely need automation. This lays the groundwork for implementing that automation, sourcing those systems to suitable suppliers, and training employees to make the most of these new tools.

Why start automation with financials?

Suppose there’s one thing that both Goldberg and Lisa Schwarz (Senior Director of Global Product Marketing for Oracle NetSuite’s Global Business Unit) agree on concerning the needs of small businesses. In that case, it’s this: Financials are fundamental.

Schwarz notes that, to a significant extent, NetSuite’s customers first implement the company’s solutions to solve accounting and other financial headaches.” (They do it) to get more rigor into” these processes, she says. Many began corporate life with family members or others filling in as bookkeepers, working with spreadsheets once a month or so. As they grow, the financial system should grow with them, yet what happens all too often is that the company stays with those spreadsheets or perhaps graduates to a limited financial SaaS solution.

The problem inevitably arises, Schwarz says: “[They are carrying] too many manual processes that they have to spend time on, and it’s taking time away from fulfilling orders because … they could be pretty lean, maybe five or ten people where you’ve got people doing the books, packing the boxes, calling the FedEx for delivery. So it takes them away from some of those more customer-facing tasks,” or deeper work, such as product development.

Financials become a foundational area where appropriate and well-implemented automation begins to create escalating benefits and ROI. When you remove bookkeeping and other basic accounting tasks from manual entry and management and implement a single system, such as NetSuite’s products or some other solution, company culture changes.

You remove pressure from your employees while simultaneously creating space and time for that deeper work.

For example, Schwarz notes, “you would enter a purchase order, which then updates your accounting segments. And then what if you invoice against that? Everything triggers the next task instead of having to juggle separate systems. As you can imagine, things get out of sync pretty fast if you’re not on top of things.”

Automation frees people up to add value

Automation in financial systems helps minimize human errors that naturally result from manual input and management. It can also help reduce fraud and other risks by verifying all information that touches on a specific vendor or transaction.

That’s especially helpful for small business owners with a tendency to micromanage. “They’re micromanaging enough as it is, Schwarz says. “So if you could take that one task away, that just helps them focus on some more value-added type of work.” Fortunately for everyone, that includes work that helps grow your company, increase revenue, or hit other business goals.

John Boitnott

John Boitnott

John Boitnott graduated from UC Santa Barbara with a Masters Degree in Education. He worked for 14 years as a broadcast news writer for ABC, NBC, and CBS News where he covered finance, business and real estate. He covered financial news for SAP for four years. Boitnott is now working as a columnist for The Motley Fool where he covers personal financial and investing strategies.

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