Cloud accounting software can help refocus the mission of the office of finance

In the upcoming years, technology is set to make a more significant impact on the finance and accounting sector in Australia than it has in the last five decades. A series of advancements in databases, data processing, analytics, and tools aimed at enhancing user experience, along with the adoption of artificial intelligence, will substantially reduce the time currently spent on inefficient manual tasks. This shift will enable the Chief Financial Officer and Controller to redirect the department’s goals, ultimately achieving the longstanding aspiration of financial transformation: becoming a more integral strategic partner within the broader company.

There are five areas most finance executives will need to address to realise this transformation

Prioritise Investment in Human Capital

Leadership and effective communication by senior finance executives are crucial to define and articulate the evolving mission. Preparing the staff for transformation will necessitate continuous investment in their skill development. Furthermore, fostering a culture of ongoing improvement is essential, where the mindset of “we’ve always done it this way” is no longer acceptable. Ventana Research Fast, Clean Close Benchmark Research highlights a direct link between a department’s ability to accelerate its closing process and the frequency of process reviews to identify and address issues. Among organizations, 67% that conduct monthly process reviews can expedite their closing process, compared to 50% that review on a quarterly basis, and merely 26% that lack a structured review process.

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Technology also plays a crucial role in the transformation of finance processes. Effective automation through the right technology can simplify complex processes, saving valuable time that the department’s staff can redirect toward achieving more and delivering greater value to the wider organisation. The research reveals that companies employing software automation for their financial close complete the process more quickly. Specifically, 71% of organisations that embrace a significant level of automation can finalize their close within six business days, contrasting with 43% using some automation and only 23% with no automation. Speeding up the closing process ensures that critical information becomes available earlier, enabling deeper insights and broader visibility.

In the next decade, artificial intelligence powered by machine learning will emerge as a pivotal capability in financial management and ERP systems. This advancement will empower departments to automate and streamline repetitive tasks that demand minimal judgment. These time efficiencies will grant staff more opportunity to concentrate on tasks that require their expertise and judgment. It’s important to note that while software doesn’t deteriorate like physical objects, it can become outdated. Employing an outdated financial management or ERP system may impede a company’s ability to access all the necessary information promptly for performance measurement and enhancement. This could undermine the department’s overall productivity. Additionally, although spreadsheets are indispensable tools, they are unsuitable for collaborative and repetitive enterprise processes involving more than five individuals.

Streamline Operations

Collaboration is a common feature of finance department operations. Over half (55%) of the participants in our financial management and ERP benchmark research stated that collaboration is frequently or mostly required in their work. Therefore, it’s essential to foster a culture of continuous improvement and explore opportunities to enhance coordination and handovers. Organisations should proactively work towards refining their processes whenever needed. According to the Fast, Clean Close research, the most frequently mentioned reasons for expediting the closing process include having more time for analysis, conducting audits before releasing financial statements, and expediting the dissemination of financial and managerial information. Employing the right software can serve as a catalyst to accelerate processes such as the financial close.

Prioritise Data Accuracy

Inefficient handling of data is a key factor contributing to excessive workloads for staff. Similar to the principles applied in manufacturing, integrating data quality into the core of business processes yields significant benefits. Finance organizations grappling with notable data quality issues typically require almost three extra days to complete their closing processes compared to those facing minimal or no issues (nine days versus 6.4 days). A lack of data quality control necessitates time-consuming reconciliations, error detection, and addressing the repercussions of unchecked errors, resulting in additional time and costs. Furthermore, data quality underscores the importance of avoiding the use of spreadsheets in enterprise accounting procedures. The research on Spreadsheets in the Enterprise indicates that 35% of participants encountered data errors, and 19% identified formula errors in the most critical spreadsheets used in their roles.

Showcase Value

Finance leaders should initiate a strategic project that not only adds value but also underscores the department’s dedication to becoming a catalyst for business growth. An effective approach could involve enhancing the budgeting process to simplify it for budget owners. Finance professionals tend to view things through a financial lens, whereas those in line-of-business roles focus on tangible elements such as headcount, quantities of materials procured, or the number of marketing leads required to close a sale. Implementing a specialized budgeting application that empowers budget owners to plan in concrete terms and, with software assistance, translate these specifics into financial figures streamlines the budgeting process. While technological advancements hold the potential to turn the long-standing vision of finance department transformation into reality, it is imperative for finance executives to address people, process, and data-related challenges that may impede progress. The right software solution plays a pivotal role, serving as the linchpin to grant departments the capacity to allocate more time to high-value tasks. This, in turn, facilitates greater flexibility and agility in operations while providing invaluable strategic guidance to facilitate well-informed decision-making.

Contact us at Akuna Solutions and find out from a Sage Intacct implementation specialist the right technology for a finance transformation which can support your organisation’s mission. 

(Text Source: Ventana Research Fast, Clean Close Benchmark Research / Photo by Daniel Páscoa on Unsplash)