As discussed in our previous post, manual accruals quietly drain resources and create risk for finance teams. But the story doesn’t end with solving compliance challenges. High-impact finance teams are finding that accrual automation is about more than just regulatory requirements – it’s becoming a catalyst for financial transformation.
Accounts payable (AP) teams, and the finance function as a whole, is advancing beyond transaction processing. Today’s finance teams are also expected to predict what will happen and influence what should happen. In this competitive landscape, companies with better financial intelligence win. Accurate accruals are a critical but often overlooked piece of that puzzle.
From Compliance Necessity to Strategic Asset
GAAP, or Generally Accepted Accounting Principles, requires expenses to be recorded in the period they’re incurred, not when the invoice is received. For public companies, accurate accruals are non-negotiable. But for private companies, accruals deliver strategic value that goes well beyond compliance.
A reliable, systematic accrual process unlocks insights hidden in spending patterns. These patterns can reveal:
- Vendors who consistently delay invoicing, causing cash flow planning issues.
- Seasonal spending fluctuations that would otherwise be missed.
- Expenses that can be consolidated for better purchasing power.
- Unexpected spending variances that signal issues to address.
It’s understandable why most companies limit accruals. It’s manual, time-consuming work. Yet by automating this process, you create a reusable tool that delivers visibility without adding complexity, every single month.
This visibility leads to smarter decisions around resource allocation, vendor relationships and budget planning. Companies gain a real competitive advantage by understanding their financial position more quickly and accurately than their competitors.
The Transformational Benefits of Accrual Automation
The move from manual to automated accruals delivers three transformational benefits that go well beyond compliance:
1. Faster financial close with more confidence
Month-end close is stressful, but accrual automation can shorten this process by days. When estimates are generated systematically based on historical data, open purchase orders and pending approvals teams can close faster and more accurately.
This acceleration allows finance teams to deliver financial reports to stakeholders faster and with more confidence in the numbers, freeing up time for strategic analysis rather than manual calculations.
2. Scalability without adding headcount
As transaction volumes grow, manual accrual processes become unmanageable. Without automation, scaling means adding headcount, which increases costs without necessarily improving results.
Automated accrual systems scale with business growth. Whether processing 500 or 5,000 transactions a month, the system maintains consistency and accuracy without requiring additional resources. This allows finance teams to support business growth without proportionally increasing back-office costs.
3. Better decision-making
The most strategic benefit is the financial visibility that comes from having a complete and accurate picture of expenses when they are incurred vs. when the invoice is processed.
Such real-time visibility enables business stakeholders to make stronger data-driven decisions. This means more precise forecasting, better anticipation of future expenses and more strategic allocation of financial resources.
Building a Data-Driven Finance Function
As routine tasks like accrual calculations become automated, finance professionals are free to focus on analysis rather than recordkeeping. This creates space for higher-value activities that truly leverage financial expertise.
The role of finance professionals is evolving. Where AP staff once spent days tracking down missing expenses and reconciling spreadsheets, they can now become strategic advisors who identify spending optimization opportunities and enhance financial performance.
AP teams can deliver tremendous strategic value through data-driven spend intelligence, cash flow optimization and fraud prevention. This is key to competitive advantage.
The Future of Finance Operations
The vision for modern finance operations goes beyond just eliminating manual work. It’s about turning financial data into actionable intelligence that drives business success. Accrual automation is a critical piece of this transformation—capturing expenses as they happen and providing the foundation for accurate financial reporting and analysis.
As finance teams continue the shift from transaction processors to strategic business partners, automated accruals will become even more valuable. Companies that implement these systems aren’t just solving compliance challenges, they’re redefining finance teams as a strategic driver of business success.
Ready to see how accrual automation can transform your finance operations? Learn more about our NetSuite-native Accrual Automation solution, part of our full Automate AP suite.
If you want a closer look at how this solution works in NetSuite, check out our on-demand webinar below.
