Better use of resources
Companies that focus on getting greater analytical insights from their finance function gain even more than those valuable perspectives; they also enhance their prospects for attracting and retaining talent. If they first focus on getting their policy and processes aligned, businesses then can implement technology that takes away their people’s “busy work,” clearing time for higher-priority tasks that enable finance professionals to work as strategic business partners. For example, leading finance corporate performance management (FCPM) tools can provide proper controls for the financial close while automating reconciliations and removing the heavy ledger-entry burden from the accounting department. Accountants instead can focus on assessing business trends and determining potential risks — not just identifying late accounts receivable, but examining why and what the business implications are. Training and change management should be considered prior to a technology upgrade; astute companies will thoroughly educate users on new technology-enabled capabilities and may rethink what their training regimens need to look like in a remote or hybrid work model.
Further, an increase in acquisition activity translates to more demands placed on finance professionals, making it more important than ever to assess what processes can be automated to free up capacity among the workforce. The proper FCPM tool can enable faster automation of the financial close and can be used in conjunction with other technologies such as robotic process automation to extend the level of automation across other areas of the enterprise.
Greater data visibility and predictive capacity
A process-first approach to transformation helps organizations hone technology to heighten data visibility. This, in turn, helps finance make more accurate projections and better decisions for the overall business. With newfound flexibility to maneuver, finance professionals can focus on optimizing the accuracy of the higher-priority, higher-risk accounts that have the greatest business impact. Finance, thus, can focus on better investment decisions that make the business grow rather than being the source of bottlenecks.
A pandemic-era innovation that has shown particular promise for some organizations is the virtual close command center, a system in which organizations move away from a hard financial close each month. Instituting a soft monthly close – and relegating the hard close to a quarterly basis — frees finance from performing tasks of dubious value simply because they’ve “always been done that way.” Instead, finance professionals can examine flawed processes, such as those that trigger low-dollar manual journal entries, and probe the origins of transactions. The virtual close command center also gives controllers a dashboard view of the real-time status of the close process, a capability that allowed some organizations to avoid extending their close even when the initial COVID-19 shock rocked the world.
Enhanced controls and governance
A centralized, clearly defined governance structure plays a vital role in a successful finance transformation. Strong executive sponsorship from the outset is a must. It will keep the initiative on track and keep all eyes focused on the desired outcome, and a centralized structure will prevent an organization from falling prey to the chaos of disparate reconciliation processes that lack ownership.
Technology that offers leading-class rules can help standardize processes across the finance function — such as auto-certifying accounts that have minimal activity — and mitigate risk posed to the organization by business subgroups that otherwise might seek to customize features as an implementation expands across the enterprise. Equipped with better visibility into risk and greater confidence in the financials, a business can have better controls and adherence to policy governing procedural modifications.
The bottom line
Even as they contemplate the array of technological capabilities available to them, finance executives first must have a clear understanding of all the processes their teams perform and how those must be improved for their functions to realize true transformation. That understanding will be informed by assessing the future of the organization and its technology landscape. Will acquisitions play an increasingly large role in the company’s growth? If so, will the business consolidate into a single enterprise resource planning system? Will finance be changing the way it manages and measures risk? The answers to those and other questions about organizational goals should drive the ultimate decision on which technologies to implement and how.