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Is the future of finance in automation?

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Is the future of finance in automation? 1

By Craig Stewart, CTO, SnapLogic

The global pandemic has caused mass disruption for people working in all job functions, in all businesses, across every sector. For the finance team especially, new business-critical decisions on when and where to spend capital to keep a business afloat have become par for the course in the world of COVID-19. Although the focus has been on reacting with agility to the new normal’s challenges, the usual day-to-day tasks of managing daily cash flow, customer transactions, and employee payments still need to be considered.

Technology that enables automation has increasingly been at the heart of many finance teams’ strategies. This was true before the pandemic but even more so now. Automation takes the pressure off finance professionals by taking over many repetitive administrative tasks that take up time but don’t necessarily add meaningful value, aid in business-critical decision making, or require their hard-earned skills.

Automation-powered technology and applications are becoming commonplace, forming an essential part of many digital transformation strategies. Automating back-end finance processes ensures data is moved to where it needs to be, quickly and efficiently, while eliminating the potential for human error and the time delay of human input. As a result, finance teams get more done, faster and with greater confidence.

However, automation is not without its challenges – critical data needed for finance workflows can often be buried deep within company systems, siloed away from easy access. This can cost finance, or IT teams, considerable time locating, identifying, and integrating data, time that could be better spent focussing on business-critical activities.

Craig Stewart

Craig Stewart

Traditionally, manually integrating data like this can take IT developers months to complete; however, the initial set up is only the beginning. From here, data pipelines need ongoing maintenance to keep up with the changing demands of the business. Ultimately, as more new data pipelines are brought on board, an organisation’s data infrastructure can become complex, brittle, difficult to manage, and importantly, resource-draining and expensive to maintain. As a result, finance teams are left with limited financial insights, additional manual data entry, and more time spent waiting on IT to maintain and update the workflows.

Where to start?

With so much to potentially gain from automation initiatives, it can be challenging to know where to start. Below are the top five financial processes ripe for automation.

  1. Order-to-cash: An absolute staple of the finance team – automating this process can streamline the cash flow into a business. Completing a single deal with a prospective new client can mean integrating data between Salesforce, Docusign, and Netsuite in order to complete the sale, manage the signed contract, and generate the invoice. If this process is automated, finance professionals can spend less time manually checking orders and cash flows between systems.
  2. Loading the ERP: It’s essential for finance to compile and track billings and invoices of clients, as well as manage the use of consultants and third-party vendors. Automation can simplify and accelerate the back-end system workflows which connect data sources into their ERP system, reducing the need for manual input and therefore the chance for human error.
  3. M&As: Incorporating multiple companies into a single rationalised technology infrastructure is a complicated process, and if completed incorrectly, can lead to the worst features of both systems making their way into the final system. A merger must consider and bring together countless different ERP and finance applications that were in use in the respective In many cases, these can vary between regions and markets. With automation, IT professionals can determine and execute which legacy applications are unnecessary and need to be retired, and what go-forward systems need to be integrated.
  4. Supply chain: Often, in companies which use a high number of legacy systems, the supply chain can operate in isolation from the finance team. Rationalising information such as warehouse stock within the same system the finance team uses can help determine critical sales data and deliver timely insights that can power future business strategy.
  5. Financial modelling and planning: Gaining a holistic view of data from the different business lines such as sales, marketing, product, and customer service can be a time-consuming process. By integrating data and enabling data warehouse automation, you can pull data from across the business giving financial analysts the information they need to complete financial modelling and revenue forecasting.

Automation has the power to revolutionise how finance drives the business forward, and in the current climate of day-to-day disruption and changes, it can mean the difference between success and collapse.

Finance

Elon Musk says bitcoin is slightly better than holding cash

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Elon Musk says bitcoin is slightly better than holding cash 2

(Reuters) – Tesla Inc CEO Elon Musk on Thursday said that owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold.

“However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere,” Musk said in a tweet. “Bitcoin is almost as bs as fiat money. The key word is ‘almost’.”

He also defended Tesla’s action to invest in bitcoin, saying that the difference with cash made it “adventurous enough” for the S&P 500 company to hold the cryptocurrency.

Tesla’s $1.5 billion bitcoin purchase set the cryptocurrency soaring toward this week’s record peak above $50,000 while Musk’s recent promotion of dogecoin on Twitter also lifted the price of that cryptocurrency.

Bitcoin was steady just below a record peak of $51,284 on Friday.

(Reporting by Aishwarya Nair and Shubham Kalia in Bengaluru; Editing by Sam Holmes)

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COVID response drives $24 trillion surge in global debt: IIF

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COVID response drives $24 trillion surge in global debt: IIF 3

By Marc Jones

LONDON (Reuters) – The COVID pandemic has added $24 trillion to the global debt mountain over the last year a new study has shown, leaving it at a record $281 trillion and the worldwide debt-to-GDP ratio at over 355%.

The Institute of International Finance’s global debt monitor estimated government support programmes had accounted for half of the rise, while global firms, banks and households added $5.4 trillion, 3.9 trillion and $2.6 trillion respectively.

It has meant that debt as a ratio of world economic output known as gross domestic product surged by 35 percentage points to over 355% of GDP.

That upswing is well beyond the rise seen during the global financial crisis, when 2008 and 2009 saw 10 percentage points and 15 percentage points respective debt-to-GDP jumps.

There is also little sign of a near-term stablisation.

Borrowing levels are expected to run well above pre-COVID levels in many countries and sectors again this year, supported by still low interest rates, although a reopening of economies should help on the GDP side of the equation.

“We expect global government debt to increase by another $10 trillion this year and surpass $92 trillion,” the IIF report said, adding that winding down support could also prove even more challenging than it was after the financial crisis.

“Political and social pressure could limit governments’ efforts to reduce deficits and debt, jeopardizing their ability to cope with future crises.”

“This could also constrain policy responses to mitigate the adverse impacts of climate change and natural capital loss,” it added.

EUROPE DEBT

Debt rises were particularly sharp in Europe, with non-financial sector debt-to-GDP ratios in France, Spain, and Greece increasing some 50 percentage points.

The rapid build-up was mostly driven by governments, particularly in Greece, Spain, Britain and Canada. Switzerland was the only mature market economy in the IIF’s 61-country analysis to record a decline in its debt ratio.

In emerging markets, China saw the biggest rise in debt ratios excluding banks, followed by Turkey, Korea, and the United Arab Emirates. South Africa and India recorded the largest increases just in terms of government debt ratios.

“Premature withdrawal of supportive government measures could mean a surge in bankruptcies and a new wave of non-performing loans,” the IIF said.

However, sustained reliance on government support could pose “systemic risks” as well by encouraging so-called ‘zombie’ firms – the weakest and most indebted corporates – to take on even more debt.

(Reporting by Marc Jones; Editing by Toby Chopra)

 

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Bitcoin’s record price unsustainable without lower volatility – JPMorgan

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Bitcoin's record price unsustainable without lower volatility - JPMorgan 4

LONDON (Reuters) – Bitcoin’s charge to a record north of $50,000 isn’t sustainable unless the cryptocurrency’s price swings cool down quickly, JPMorgan analysts said in a note.

The world’s biggest digital currency hit a record of $51,300 on Wednesday after smashing the $50,000 mark for the first time a day earlier, fuelled by signs it is winning acceptance among mainstream investors and companies.

Bitcoin’s three-month realised volatility, or actual price moves, is 87% versus 16% for gold – an asset proponents say it could threaten, the U.S. investment bank said in a note published on Tuesday.

The value of all bitcoin in circulation has swollen to $900 billion from $200 billion in September, the analysts said. The $700 billion jump has come the back of a total flow of just $11 billion from institutional investors into major trusts and futures markets.

Bitcoin’s limited supply – based on “miners” producing a set number of new coins – has led to a holders charging a premium on bitcoin coming to market, JPMorgan said. Retail flows may have also magnified institutional flows, it added.

(Reporting by Tom Wilson; editing by Thyagaraju Adinarayan)

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