Modern finance teams leveraging technology are increasingly becoming a competitive differentiator in today’s business landscape.
In the past, staying in control of the books was a full-time function. Most of the finance team’s daily tasks focused on either administrative or gatekeeping duties – trying to curb behaviors that could hurt a business’ bottom line.
While gatekeeping will always remain a core responsibility, the rapidly evolving role of IT in finance means today’s finance function is also tasked with an increasingly strategic role. Apart from balancing the books, controlling spend management, and forecasting trends, the finance team can generate valuable insights for the leadership team. They have a unique potential to enable change and drive growth. But businesses first need to make an initial investment in technology and resources before the finance team can become fully-fledged advisors.
Optimizing the finance function’s capacity
While most businesses are warming to the notion that the finance function has an influential seat in the boardroom, many still underutilize the department’s capacity for generating insight. A CGMA survey conducted last year revealed that more than 5,500 finance professionals expressed a desire to spend more time advising and supporting decision-makers.
Properly applied, technology can free up more time for finance to deliver value. An adequately resourced finance department with a clear roadmap on how their tech stack will evolve becomes a hub of intelligence. It can present insights on spend management, SaaS subscriptions, ideas for reducing costs and boosting efficiency – and future cash flow – while still controlling the books. Freeing up time and providing more detailed data gives finance departments the ability to take on additional decision-making responsibilities and guide the business toward growth.
Finance is a key business function, but it’s typically the most traditional and the least agile. However, the current inflexion point created by the coronavirus pandemic is the perfect opportunity to make a change.
Cutting through the clutter to boost efficiency
The sheer amount of administration that the finance team must process manually is a major obstacle in its quest to adopt strategic and advisory responsibilities. Moving data between spreadsheets and various software takes up countless hours – finance teams spend 39 percent of their working week collecting and processing, according to Soldo research.
These time-consuming tasks strip the finance function of opportunities to analyze the data, let alone communicate it to other departments. The remaining time goes to much-needed responsibilities, such as budgeting. While undeniably critical to business growth, these areas can also consume a disproportionate amount of the team’s time due to inefficient processes.
Businesses can implement technologies such as more closely integrated software and automation to eliminate this risk. Software that imports and exports data in a standardized format prevents information from becoming stuck in ‘silos’, while automation can perform these tasks at the push of a button. The latter is constantly evolving, and today it can take on tasks from reporting and reconciliations to expense management.
Smarter control of spend management
Spending is an essential part of any well-functioning business, and the finance function acts as responsible gatekeepers to keep spending under control. However, many businesses – even those who generally consider themselves ‘tech-savvy’ – still use outdated spend management solutions. Perhaps unknowingly, these businesses burden their finance teams with manual, time-consuming tasks that offer limited visibility.
Spend management technology, however, provides all the benefits of traditional gatekeeping whilst also enabling the company to spend as necessary. Personalized budgets can be assigned and purchase requests completed in seconds, so your finance team can maintain full financial control – without stifling the ability of staff to do their job, stunting your company’s growth and culture in the process.
The near-real-time data provided by modern solutions gives the finance department a significantly improved view of the business’s cash flow and financial health. With this improved visibility, the finance department can make decisions it wasn’t previously able to, making them more agile and responsive than their peers.
For example, spend management technology can help finance teams catch and eliminate so-called orphaned apps – unused apps that companies unknowingly continue to pay a subscription for each month.
Dawn of the remote finance function
Like the rest of the business, the way finance departments work has also been affected by the coronavirus pandemic. Employees who may previously have never considered it possible – or may never have been allowed – to work from home have largely demonstrated that it can be done successfully.
However, for finance teams, it means that they must be able to securely access sensitive information remotely. This means choosing tools and technologies that are accessible from anywhere.
Work that was predominantly office-based before the pandemic will most likely never return to the old status quo and businesses must factor this into decisions. Working remotely should therefore not be regarded as a separate add-on to the finance team’s needs, but an integral part.
The finance function of the future
For every hour that the finance team spends on a repetitive, easily automated task or gatekeeping spending via arcane paperwork, the business loses out on an hour of consulting, analysis, forecasting or counsel.
By adopting powerful emerging technologies combining automation, reconciliations, expense management, and data analytics, finance departments will have more hours in the day for high-value analytical and advisory tasks. Also, these technologies promise to generate insight and yield significant efficiencies.
A clear vision for the future finance function – which is aligned with the business’ overall purpose and business strategy – gives finance team members a shared ambition and provides the focus for efforts and investment decisions. In the digital age, this vision needs to include how smart technology and smart people should work together to create value.
Dynshaw Italia, CFO, Soldo