Financial Automation is Coming FastBy Rebecca Morrison
Welcome to another edition of the Weekly Financial Digest!
Each week, the team here at Lola bookmarks our favorite articles about corporate finance. Then, we take those and summarize them for you.
This week, we’re featuring a few articles about financial automation. It’s a hot topic right now and it’s only going to heat up as we move further through 2019.
We’re also diving into leadership content a little bit this week. It’s a topic we haven’t covered in a few weeks, but all leaders could use a little advice from time-to-time.
Let’s get started with an article from Mineraltree.
How Businesses Are Underestimating The Cost of AP
We mentioned it last week, but it’s worth repeating: paying invoices is likely costing your company more than you think.
If you haven’t implemented a fully automated AP system, you should think about it. Here’s how one of those systems can help you:
They save time by taking care of your most tedious tasks. On top of that, those same automations also reduce the number of errors that can be made from manual data entry.
You’ll save on human capital. Typically, as companies scale, they add headcount to keep up with invoice management. Automated systems scale easily, no matter how large your company is.
That’s only two benefits. There’s more to read from our friends at Mineraltree about this topic.
The Challenge Of Expense Reporting In An Amazon World
Two weeks ago, we mentioned that Amazon has become the number one source of business transactions. People are making work-related purchases from Amazon more than ever before.
There’s just one problem, expenses submitted from Amazon are often pretty vague. It’s hard to tell if that purchase was a client gift, snacks for a team retreat, or something else entirely. The fact that Amazon sells everything makes it really hard to decide if that $2,000 expense is in-policy or out-of-policy.
The solution to this problem is expense visibility through automatically collecting “expense metadata.” Manually collecting expense metadata is nearly impossible, but expense management systems make it a whole lot easier.
Get the full scoop on expense metadata from Abacus.
Delivering AI ‘Explainability’
We’re going to stick with the automation theme for a second. One of the biggest questions at a recent conference on AI ethics in the financial sector was, “Can decisions that materially affect people’s lives be outsourced to a machine?”
There’s worry that with the rapid-rise of AI, companies are going to be making decisions on things they don’t fully understand, just because their AI told them to.
That’s why AI systems need to have the ability to explain their decisions. This isn’t always easy though because one benefit of AI is that it can make complex decisions that would be nearly impossible for a human to handle on their own.
There isn’t a solution to this problem yet, but Financial Management Magazine does have more on the topic.
From Eco-Damage, to Defrauding NASA: The Craziest Things That Debarred Companies
If your company gets debarred, it means you can no longer do business with the federal government. You’re essentially blacklisted. Companies typically get debarred for illegal or fraudulent activity.
AppZen wanted to find out exactly what leads to companies getting debarred so they dug around and found a few companies who were debarred for really wild reasons.
Skimping on payroll
Construction company, Pro-Fit Development, didn’t want to pay backwages to their employees. Pro-Fit only owed $4,715 to their 11 employees, but they refused to pay up. As a result, they were debarred.
Lying to NASA
Sapa Profiles sold cheap aluminum to NASA that didn’t meet the specifications that NASA asked for. Sapa deliberately lied about it too, and it ended up costing NASA $700 million.
AppZen has a few other examples. Read the post for more.
Does Your Leadership Style Scare Your Employees?
Taking a departure from finance content for a second, Harvard Business Review just published this interesting post. Leaders scaring their employees isn’t a topic that’s covered often, but it does happen.
So, how can you be sure that you’re not intimidating your employees?
First, assume you’re scaring them. Given the power differential, there’s a chance your employees are nervous talking to you.
Next, ask open-ended questions about team culture. These questions should probe into times when an employee felt like they couldn’t express their ideas.
Check whether you are projecting your fears onto others. Leaders are often under enormous pressure to succeed. Don’t project that pressure onto your employees.
We’ve barely scratched the surface here. There’s a lot more to learn from HBR.
In IPO news, space tourism company, Virgin Galactic, plans to go public. Money Morning thinks Virgin Galactic’s IPO could be one of the most exciting of 2019, mostly because of the size of the space tourism market. Virgin Galactic’s IPO gives investors the chance to get into a company at the ground floor. Something that’s not too common unless you’re a VC.
On the flip side, Google’s parent company, Alphabet, announced better than expected financial results.