If you think you might need to reduce the size of your finance department there are a couple of questions one should first consider. How many people are on your financial team, and how does that compare to similar companies? How much time are members of the department spending on repetitive tasks? Has your company been using technology to automate financial tasks at least as much as your competitors have?
A company’s CFO is no longer confined to just sharing financial reports with the rest of the executive department. CFOs now play a central role in making business decisions and working closely with the CEO.
As such, the CFO is now more reliant than ever on the controller and their team to take care of the day-to-day accounting activities, like chasing down invoices, paying bills, performing cash recons and identifying/adjusting journal entries.
Much of this can now be done through technology, what many are calling the “finance digital transformation.” In addition to streamlining your financial staff, automation allows for more accurate bookkeeping and frees up remaining team members to contribute more to strategic financial analysis.
Your company’s accounting department has a tremendous responsibility in managing the business’ finances. When a team is bogged down by excessive manual tasks, these delays can result in losses to your company. By implementing new technology, your team can become more proficient at money management and receive financial data in a more timely manner that can help the company increase profits.
1. Your Finance Team Must Understand Analytics
All members of finance departments must have an understanding of how to use data analytics technology now that the manual processes they previously performed are being executed through more sophisticated digital means.
While technology is able to provide the figures and statistics, your finance team must be able to transform that data into usable information. There are automation tools that can greatly assist them in this process.
CFOs and CEOs should expect their financial team to know what the figures mean and what kind of actions should be considered based on the numbers.
2. Technology and Automation
Technology is taking a leading role in all aspects of business, and the finance team is no different. Not only are staff more informed because of better, real-time data, automation now impacts how a firm conforms to regulations.
For example, you can use automation software to comply with anti-money laundering regulations more effectively. Before, you would have to expend manpower to search for transactions that might be suspicious, but now such transactions can be flagged automatically using technology, and then a team member can judge each of these individually.
New technology and online software can also interpret national and international tax codes that can do much of the work a tax team would have once done.
Instead of outsourcing to professionals to help with the tax process, by integrating automation into your workflow, you will be able to save a huge amount of time and money. By having access to real-time tax data, organizations can better prepare and mitigate large tax liabilities before filing deadlines approach.
In addition, team members no longer have to create and maintain manual spreadsheets. Cloud services can now enable the finance team to share information instantly with other team members.
3. Using the Cloud
Since many of us are now working from home, in a coffee shop, or while we’re commuting, it’s essential to take advantage of technology that allows us to work collaboratively. Cloud computing does just that.
By using cloud-based technology, you can be just about anywhere and share information and receive feedback from other members of the finance team as well as from people in other departments.
Having access to information on the cloud allows for real-time analytics, so decisions can be made without meeting face-to-face. This ability to work efficiently and effectively will increase the overall quality of your company.
Another benefit of cloud computing is that all data is maintained off-site, making it harder for malicious software to impact your files and allowing for a better disaster recovery environment.
4. Financial Planning
Two aspects that are especially important to forecasting and financial planning are data and analytics. As previously mentioned, the new role for the financial team will be more about forward thinking and less about recording journal entries.
Rather than just being focused on what happened the prior period, your finance team will be engaged in predictions and forecasts.
With access to information given to them by new financial automation tools, team members will be able to identify how the business is performing in relation to the goals it’s defined. It also allows your staff to take time to look at how competitors are doing, what kind of an impact higher operating expenditures could have, or how higher tax rates could affect the bottom line. In these times of economic and political uncertainty, using data and analytics effectively is key to your company’s survival.
Now that competition is growing within many industries and companies are able to be up and running faster than ever, CFOs need all the help they can get to keep their colleagues informed about the company’s financial health.
It is imperative that the information about things like the company’s cash flow, unanticipated expenditures, and foreign currency exposure must be accurate and immediately available to the appropriate staff.
Using automation to consolidate your analytics and data will also help the finance team to quickly spot which of the company’s clients are more profitable and those which are a drag on the company’s manpower and revenue stream.
You’ll also be able to easily identify which of your goods and services are more profitable than others. If you have put a lot of time and money into a certain product, but the return on that product is insufficient, then the managing executives might need to change course.