Increased digitalization of finance and accounting processes is the way to the future, says this finance-automation expert.
As companies navigate through the challenges brought about by COVID-19 outbreak and the accompanying economic recession, CFOs and finance teams have a crucial role to play: maintaining productivity in spite of remote-working, and scenario planning for the cash flow and supply chain disruptions, among other challenges.
Every department is searching for ways to increase their value and reduce expenditures. While some organizations have resorted to trimming staff, future-focused CFOs have a wiser perspective. Higher productivity and increased strategic capability in Finance saves the entire organization money through increased access to real-time data, improved capacity for rapid decision making, and reduced errors and discrepancies.
In addition, CFOs are considering hastening investments in automation initiatives to improve management of their companies’ finances and operations despite facing revenue declines stemming from COVID-19. While there are cost cuts, some view investment in automation to be essential to equipping remote finance teams and strengthening other parts of the business.
Liberating Finance & Accounting through automation
Automation is the best friend of productivity. Yet, there is only so much automation in many finance and accounting functions, and therefore only so much productivity.
Too many accountants are still bogged down in the trenches using spreadsheets to accomplish complex accounting and finance tasks. The various processes involved in closing the books, reconciling intercompany transactions, and tracking key finance controls are completed the same way they were a generation ago—manually.
The enormous amount of time these manual processes consume can be redirected to assist the CFO and the company’s enterprise performance management agenda. In many businesses, the CFO is charged with enhancing business intelligence, developing more accurate forecasts, and tightening internal controls to ensure accurate financial reporting and proper compliance. All of which would benefit from the intellectual firepower of Finance and Accounting, if only accountants had the time to provide it.
Also, today’s CFOs are being challenged to adjust to and anticipate changes that occur with more frequency, and in some cases, greater impact than ever before—this is where the role of automation becomes vital.
A preliminary investment in automation solutions and integrated platforms means accountants’ efforts can be used in service of valuable analysis and insight, instead of time-consuming manual work. It also allows for data-driven rapid decision making, which is more crucial than ever.
Even as offices reopen, almost half (48%) of CFOs will accelerate automation and other new ways of working. Despite the bleak economic situation, increased digitalization of business processes is the way to the future, especially so for the finance function.
Elevating Finance’s role to ‘Strategic Business Partner’
Modern CFOs are transforming the role of Finance from a back-office function to that of a strategic business partner that provides real-time visibility into—and analysis of—financial assets and resources.
Real-time insight, instead of months-old data, enables leadership to pivot quickly to meet customer and stakeholder demands and thereby seize new opportunities before the competition does.
Better information is not the only driver in this transformation. Leveraging uncertainty into a strategic advantage also requires transforming people and processes. Automated, streamlined processes free people to focus on strategy creation and predictive and prescriptive analysis—work that enables Finance to step into a true partnership role.
Benefits of automation in Finance
Whether it is month-end, quarter-end, or year-end—a timely, accurate financial close is an important responsibility of finance functions. Yet, many teams rely on established manual processes and in-person communication to close the books.
In a distributed workforce where finance professionals are still required to close the books while working remotely, these practices are not feasible. A fully-virtual close is possible but achieving this begins with shifting close processes to become more continuous.
Continuous accounting is a modern approach that involves automation, controls and period-end tasks, transforming the way businesses processes work by emphasizing real-time processing and deep analysis. This creates a more efficient close process and helps to ensure accuracy by reducing the risk of human error that comes with the repetitive nature of many finance tasks.
Cloud-based technology solutions, built specifically for accounting and finance departments, can increase controls and dramatically reduce risk in its many forms, while being deployable quickly and scalably. Managers can then have a high-level view of the addressed risks, performed audits, identified issues, and steps taken for remediation, wherever employees choose to work from.
Great uncertainty brings great opportunity
For CFOs who still believe Finance’s job is to deliver months-old information via an onerous monthly close process, accelerating change—in technology, finance, and economics—will only generate more fear and uncertainty.
For CFOs ready to embrace change, opportunities abound. Instead of shrinking from uncertainty, these CFOs will leverage it to drive improvement in every accounting process. This means taking advantage of new technology solutions designed to streamline and automate repetitive tasks, elevating the role of the accountant.
As a result, Finance will finally have the opportunity to evolve from being just a back-office function to the role of business partner—an efficiently-run strategic function that reduces costs and delivers insight crucial to ensuring the organization is poised to thrive.