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Finance leaders are increasingly asked to help their company stay on course, not just from a budgetary perspective but from a strategic one as well.
At a time when businesses are being tested by momentous geopolitical events, roller-coaster currency exchange rates, and volatile commodity prices, this is no small task. Add to this a higher level of scrutiny from internal and external stakeholders, whose confidence has been shaken by the rising tide of uncertainty, and it becomes clear why CFOs are expected to deliver more accurate information more quickly.
Which brings us to why businesses are turning to automation to make finance processes faster and more efficient. Automated processes allow CFOs and their teams deliver more frequent, accurate reports, complete a financial close more quickly, and crucially dive into company data to instantly deliver strategic insights to other business leaders.
Automated processes allow CFOs and their teams deliver more frequent, accurate reports, complete a financial close more quickly
A new report from CIMA (Chartered Institute of Management Accountants) reveals that 83% of its members support more automation in finance when it saves time and money, or helps combat indecision.
And while there is worry among some finance workers that automation poses a threat to their careers, the opposite is true. If anything, it simply frees them up to focus on more value-adding activity and contribute to future strategies. Two-thirds (62 percent) of respondents to the CIMA survey see automation as a route to greater efficiency.
Finance Digital Imperatives
Finance professionals understand this need. Our recent survey, Modern Finance: Driving Transformation from Within, found that more than half (54%) of finance leaders support changing the company’s current finance systems to meet needs for greater productivity and agility. Just as tellingly, 43% support making these changes to respond to a greater need for innovation and fresh thinking.
There are many reasons automation is becoming one of the CFO’s greatest allies, but a few points in particular stand out:
Many companies admit they still conduct their reporting using manual data entry and spreadsheets, which results in very long processes that can be held up at many points along the chain. Some of the organizations Oracle works with admit it used to take them upwards of 20 days to complete their financial close in the before they automated their reporting approach.
With automated processes in the cloud, rather than a loosely organized regime of emails and a frustratingly unclear audit trail, any entry or amend made to a report is automatically reflected across every other document it impacts. This means everyone is working with the same, up-to-date information.
All this adds up to a faster process and a clearer audit trail, which in turn allows businesses to share reports as and when stakeholders need an update, not just on a quarterly basis.
With a more unified and accurate reporting process also comes greater accuracy
CFOs need to make decisions quickly and be certain they are based on sound information. Making sure the right data is in the right hands at the right time, and that it is accurate is absolutely crucial for the modern CFO. Manual processes simply aren’t up the task.
With a more unified and accurate reporting process also comes greater accuracy. Manual processes typically involve many players working with many versions of many spreadsheets, and therefore open the door to many potential errors.
The new “Champion” for applied analytics
In the case of accounts reconciliation, each pass can involve thousands of reconciliations and involve hundreds of employees. A team under pressure to complete their close is already more likely to make an error, and tracking any mistake in this web of processes can be a significant time drain.
When everyone works from a single, up-to-date source of information the chance of errors is greatly reduced, which means companies can complete their financial close more quickly and with greater confidence. Amazon shortened its financial close process from five days to one by automating its processes, and today 80% of its reconciliations in fixed assets close automatically with no manual intervention.
Automated processes in the cloud also improve data security as sensitive information is no longer being passed around unguarded during a reporting workflow. All data is stored and updated centrally, and finance leaders can control access so that each contributor can only manipulate entries that are relevant to them.
Understandably, organizations have traditionally been wary of entrusting financial information to a third party provider, but those who avoid the cloud on this basis are being lulled into a false sense of security. No matter how good an organisation’s IT team or how advanced its technology infrastructure, it’s unlikely to better that of a cloud company whose experts are constantly optimizing the security and availability of its applications.
It’s encouraging to see financial professionals view automation as an opportunity rather than a threat. But while automated processes are helping CFOs and their teams work smarter and deliver on stakeholder expectations, the technology alone is simply an enabler.
The blurring of lines between man and machine isn’t about robots taking over. It’s about being able to integrate a growing treasure trove of data into the company’s day-to-day operations to enhance the way we do business. Strategic decisions are ultimately made by human beings and the task of understanding, interpreting and acting on finance data requires a keen mind, albeit one with a wider understanding of the business.
This is another way in which the role of the finance professional is changing. It takes a much wider set of expertise to make sure new technologies are being used in ways that make people more productive and add value in the boardroom.
The best finance leaders are aligned with their organization’s direction of travel and see where the processes they manage can contribute. This requires a deep understanding of data and the ability to galvanize their teams. It requires a willingness and ability to work with other lines of business to ensure every part of the company is moving in unison.
The ability to quickly and convincingly make strategic businesses cases in the boardroom is also crucial. Today’s automation applications allow users to create customized dashboards so they can share relevant financial results with internal stakeholders, and it falls to finance leaders to add context to this data.
Just as the finance function made the transition from hand written ledgers and manual calculations to Excel spreadsheets, the time has come for another major leap. So many of the ways we communicate and interact at work are automated and we’ve grown used to instantly finding the information we need at the click of a button. It’s only natural for this evolution to carry over into the finance department.
CIMA’s findings point to an enthusiasm for change, and it’s now up to businesses to deliver.