Digitisation is nothing new. Only today the major impact is being felt by accounting professionals as companies increasingly use technology to analyse data in real-time.
The next setep is CFO 3.0. A new era where artificial intelligence (AI) and machine learning (ML) gain traction. And where CFOs combine accounting, analytical, business and strategic thinking to predict the future. Find what’s behind it by reading our info graph. You can download the info graph by completing the form below.
Did you know 98% of finance professionals say the role of the CFO has changed in the past 5 years.
A further 89% agree admin has a negative impact on productivity which could be helped with automation.
And 44% are concerned about the availability of real-time data!
In this climate of change what challenges do CFOs face?
39% of CFOs hired since 2009 have experience outside the finance function, compared to 17% prior to 2009.
As companies seek to upskill their financial departments, CFOs with outside knowledge will be more sought after.
SOURCE: Sage X3 – Based on a survey of 500 US-based CFOs from December 2019 to January 2020
FOR MORE INFORMATION ABOUT THE CHALLENGES FACED BY CFOS DOWNLOAD THE INFOGRAPH TODAY!
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Is cloud financial reporting a key component for you and your finance team?
Reporting is crucial in any finance department. And CFOs have always focused a lot of their attention on analysing these reports. This is a critical part of any modern business and an important measure to understand the business performance of a company.
Whether CFOs are compiling these reporting statements themselves or assigning others to create them, their role doesn’t stop with the handing over the numbers. CFOs are charged with producing reporting that is useful to leadership and key stakeholders.They will understand the performance metrics, indicators and targets that need to be hit for the organisation to move forward.
Traditionally, CFOs have been limited to looking backwards through a rear-view mirror. They would be reviewing financial reports and balance sheets that will create the state of the business at the end of a period.
The world has and is very much changing.
Financial reporting is still highly important. However, technology and the availability of data has made it possible for businesses to get real-time information about company performance – and even how the business can perform in the future.
What’s been the problem with financial reporting?
Financial reporting has always been challenging and time-consuming. End-to-end reporting means carrying out a number of complex tasks, which have to be done to supreme accuracy. Mistakes in the process could make the entire effort invalid.
Your business might be reliant on multiple spreadsheets for financial reporting. But there’s a good chance that errors could creep in, while hours of effort are likely to be spent on maintaining and keeping spreadsheet reports up to date.
However, it’s not just a spreadsheet issue, though.
With legacy IT on-premise infrastructure, the increasing complexity of the business can put pressure on systems. This can slow down processes and cause performance to suffer. The IT team might have to do a lot of firefighting, leaving a lengthy backlog.
Financial reporting is crucial to a business. It is needed for areas such as regulatory compliance and investor relations. As a result, there are pressures that CFOs and their departments could be feeling from the business when it comes to getting better control of financial data.
According to CFO 3.0: Digital transformation beyond financial management, a research report by Sage that looks at how CFOs can move from historians to visionaries within their companies, decision-makers are still spending as much time collecting and preparing data as they are analysing it, due to unwieldy legacy systems.
As a result, 70% of CFOs said administration has a significant impact on team productivity.
Why cloud computing can help
The benefits of financial cloud solutions are already well documented. Research and advisory firm Gartner describes the major benefits as:
- The ability to keep up to date with new releases
- More consumer-like features
- Improved analytics
- Improved agility through faster introduction of new functionality
- More emphasis on finance staff managing applications, with less reliance on technical staff
And with the cloud, you have the opportunity to make financial reporting a much more streamlined, accurate and less time-consuming process. It offers error-free reporting, a single version of the truth, and tools that don’t need constant watching and manual maintenance.
How working in the cloud can make finance teams more effective
The role of a CFO and the finance department has changed. Instead of simply being thought of as financial leader, the CFO now needs to actively drive business change through finance.
Thanks to cloud technologies, they have access to a variety of tools focused on predictive analytics and intelligence, with machine learning and artificial intelligence potentially changing the game even further.
Cloud technologies help to create a nimbler and more cost-effective finance function. It minimises the need for hardware and storage, providing more scalable and easily automated processes. You can enable a connected operating environment that provides greater automation and advances in real-time insights.
Automation is a reliable way to improve the quality of financial data and increase the productivity of financial/accounting staff.
Instead of being tied up in time-consuming transactional tasks and gathering data, automation offers an alternative.
Automation can allow businesses to:
- Minimise the manual intervention needed in financial and accounting-related tasks, such as ledger entries and reconciliations
- Reduce the potential for human error
- Improve the use of staff time through a reduction in manual processes
- Increase and expedite turn-around.
Through automation and the use of integrated business systems that serve as an auditable system of record, CFOs and their departments can make use of technical capabilities to make them more effective and useful for the business.
This includes automated financial reporting with narrative analysis. Financial data with context and a clear story can be very useful. In addition, you have access to:
Real-time updates to financial metrics
Real-time metrics improve the quality of related data and the efficiency of prepared reports. Having inputs uploaded in real time rather than batch processes reduces reporting turnaround time and helps to avoid financial data gaps.
This allows multiple codes to be used to generate models and charts from compounded sets of data. It allows data and analytics from various transactions to be aggregated.
Future-proofing the finance function means more automation. More than nine in 10 (94%) businesses agree that financial management technology will play a crucial role in tomorrow’s finance function.
Conclusion on using cloud financial reporting
According to the CFO 3.0 research, 55% of financial decision-makers are responsible for data privacy, digitisation and technology investment. It might be down to you to add value and shape the future strategy of your finance function.
You could well be central to making sure your business makes the significant investments it needs on tools and systems to expand your capabilities, which may need you to move to financial cloud management software.
Moving to cloud-based financial management software can help break down data silos and accelerate the way you do business.
The right technology platform can provide a consolidated view of your financial data from across the business. It can also provide the integrated business analytics functionality to deliver the data-driven insights that a new breed of CFO needs to drive broader business transformation beyond financial management.
By monitoring and understanding this data, you can make better decisions and uncover more opportunities in areas such as cost reductions, process waste removal, customer cross/up-selling, and the delivery of new products.
Not only can analytics find you ways to cut budgets in the right areas, it can help you find suitable ways to expand.
The world of business is changing at a rapid pace. And for the finance department, that sentiment couldn’t be clearer.
As we move to a digitised world, CFOs and finance teams are being required to move away from basic tasks such as manually inputting numbers and reporting on the figures. Now, when it comes to financial management, they are moving to interpreting real-time data.
However, the next step is to become a visionary within their businesses.
But what does that mean for you as a CFO and how can you make that a reality for your role and your company?
CFO 3.0: Digital transformation beyond financial management is a new guide that looks at the evolution of the chief financial officer.
It will show you how technology such as artificial intelligence and automation can help you take your finance team and your role to the next level.
CFO 3.0: Digital transformation beyond financial management covers the following topics:
- Driving digitalisation – from historian to visionary
- Managing uncertainty – the evolution of finance
- Riding the technology wave
An excerpt from CFO 3.0: Digital transformation beyond financial management:
The intersection between technology and human interaction has created an opportunity for leaders to re-imagine business.
Fundamentally, the nature of business is evolving in all manner of ways: end users are changing, employees are changing, and the availability of tools is changing.
All impact the way work happens and how we construct, organise and operate companies. Finance heads have, in the past, used their gut to interpret the figures and understand what it means for their business.
They had no more to go on other than their intuition and experience. But data has changed that and altered the dynamics of decision making. If we look to startups, the impact of technology is clear.
Modern breakout businesses use artificial intelligence (AI) and automation to enhance connections with their customers and employees. Their ‘new age’ and tech-first approach looks very different to past business models.
They have successfully fused human needs with technology, rethinking the way we conduct business from top to bottom.
In mid-sized and larger companies, however, where technology wasn’t birthed at inception, the tide is turning.
All business leaders need to move with the times and digitisation is key to the transition. Knowing where to go, and how to get there, are two very different sides of the same coin.
While the burst of e-commerce has brought about many opportunities, its digital nature also brings about concerns of fraud, cybersecurity and the changing landscape of job roles. But behind all these changes is one driver: the finance department.
Why? Because the very essence of finance is evolving.
The finance professional now needs to be more closely aligned to individuals with the company’s managing director or CEO. They are not just the right-hand person with their finger on the financial pulse of the business anymore.
They are essential in providing up-to-date information, financial analysis and forecasting for rapid response decisions. It’s a far cry from the traditional way of doing business.
Finance professionals used to look in their rear-view mirror to provide business information – always looking behind them while trying to steer in front.
The introduction of predictive analytics is all about understanding data and looking forward, rather than back.
Today’s CFO is transforming into a real-time analyst. Tomorrow’s CFO will be a visionary.