The office of finance is one of the most dynamic departments of an organization. Subject to constantly changing laws and regulations, as well as market fluctuations and leadership expectations, the office of finance is a critical hub of activity for every organization. The audit, advanced data analytics, and demand planning are only a few of the responsibilities finance and accounting teams are expected to handle.
Unfortunately, this department is typically not equipped to effectively manage the foundation of these activities: the Record to Report process. Instead, they must rely on ineffective processes and tools, such as complicated spreadsheet systems and manual methods. This is why many organizations are looking to implement new technologies, such as Robotic Process Automation (RPA), into their office of finance, and this process starts with planning your finance transformation roadmap.
Some companies may be hesitant to take next steps on a finance transformation project because of the climate of global uncertainty. But now might actually be the best time to begin planning your organization’s digital finance transformation.
The Drive to Digital
According to a recent Trintech poll, only 19% of organizations were fully prepared to take their financial processes virtual in the wake of COVID-19. For those that were unprepared, the push to digitalize finance processes became even more urgent. With the pandemic came the realization that organizations could not ignore the rapid pace at which global business is changing. A survey conducted shortly after the global shift to a virtual environment by The Hackett Group found that almost 80% of organizations decided to continue along their finance transformation roadmaps in order to accommodate their new remote workforce and the new demands on the business overall. The constant need for financial models and forecasting (and re-forecasting) requires immediately available, visible, accurate and relevant information. Most CFO offices aren’t really prepared for this level of demand for the information to run the business.
“…nearly 80% of organizations are continuing on their transformation journey. And in the discussions that we’ve had with our clients, digital makes a difference. We know that transformation projects that are already in progress… are being accelerated. And if those projects were in the planning stage, they’re being green lighted. Driving to digital has become incredibly important and urgent right now.” – Bill Marchionni, Account-to-Report Global Advisory Program Leader, The Hackett Group
These organizations know that continuing with ineffective, disconnected manual approaches puts the company at risk for inaccurate data, compliance violations and missed cycle deadlines, among other dangerous inevitabilities. This is especially true now that many organizations have moved completely virtual after the effects of the pandemic.
And though the economic and health effects of the pandemic will subside, the expectation that companies can offer their accountants the ability to work from anywhere will be more present than ever. Organizations need to ensure that they have the appropriate technologies and controls in place to accommodate both the changing workforce and the business environment.
Because of COVID-19, 46% of organizations in The Hackett Group survey expected up to a 50% decrease in their revenue. This means organizations will be looking for ways to streamline workflow and be more efficient in all areas of the business. Looking at ways to automate your financial close process and leverage advanced technologies like RPA and AI will help increase efficiency and effectiveness for your accounting team. That is why it is more important than ever to begin the financial transformation journey.
A healthy organization requires its office of finance to balance value-adding initiatives with cutting costs when needed. This allows the organization to create sustainable growth that minimizes expenses where appropriate and capitalizes on areas of opportunity.
The way your organization conducts its finance processes requires this balanced approach. While manual processes and spreadsheets might allow your finance and accounting teams to complete the bare minimum each month, it doesn’t allow your organization to attain a level of excellence that can propel it considerably forward in the market. Automation and RPA initiatives might look costly at first glance, but can create new growth opportunities and save revenue in both the long and short-term.
Companies need to consider the cost – in risk and in dollars – of doing nothing to automate financial systems. Teresa Mackintosh, CEO of Trintech shares this perspective:
“Status quo has its own momentum. It’s easy in the moment to put it off until we’re ‘back to normal,’ but what we’re seeing with companies is it’s not a great option because it’s creating so much risk within the financial framework – and not just for internal controls, but there’s a huge gap in information needed to manage the business.”
Future-Proof Your Finance Processes
Nobody saw the pandemic coming, and very few organizations were completely prepared for its immediate effects. Many organizations had to fall back on business continuity plans or seek out new technologies to accommodate a more sustainable way to complete their work virtually.
But organizations that already implemented Cadency by Trintech to support their Record to Report process found that their shift to a virtual workforce was simpler than companies who were utilizing spreadsheets and manual approaches at the time. Moreover, organizations who have started their financial transformation roadmaps with Cadency since the pandemic will see ROI results like these:
- Up to a 90% reduction in overall number of accounts to be reconciled
- Up to a 76% reduction in cash shortages
- Up to a 75%-time savings for rework due to misstatements
- Up to 62% decrease in the amount of write-offs
“Cadency has been an incredible investment for our organization, as it was a key step in our world-class finance initiative to regain control of our balance sheet, build capacity to absorb growth and simplify the month end process.” –Secure Trust Bank
Written by: Ashton Mathai