Is Your Finance Team Prepared For The Future?
How does the technology your finance team uses impact your company’s future? As a CFO, your job is to not only understand the challenges your organization faces as a whole, but also know the limitations your finance team faces while performing processes essential to the company’s health. And, if your office of finance is utilizing spreadsheets for these processes, your company is at a disadvantage. Not only are spreadsheets riddled with data inaccuracies, but they inhibit efficient workflow and set your company up for compliance violations down the road.
More and more companies are migrating away from spreadsheets and looking to financial automation to provide the control and visibility that spreadsheets lack. Why?
The Need for Control and Visibility: The Shortcomings of Spreadsheets
Spreadsheets, which are most often the chosen tool of the office of finance, have a number of inherent failings. Not only do spreadsheets prevent a consistent control framework to avoid compliance issues, but they lack the visibility needed to track financial processes to completion.
Many infamous compliance violations can be traced back to data inaccuracies in spreadsheets. Studies have proven that 90% of spreadsheets contain errors, and many companies aren’t aware of these errors until they have to file restatements. And these simple mistakes, such as copy-and-paste transfer missteps or faulty macros, compound together until the inaccuracies are firmly planted deep within your documents. Another contribution to your compliance risk is the even distribution of attention across all your accounts, regardless of the risk level. More time and attention should be focused on your key accounts to lower your chance of misstatements. And, because spreadsheets weren’t created to hold the amount of information your company requires, secondary documentation continually builds up until there are multiple disparately-linked spreadsheets everywhere— a climate not ideal for audit purposes or audit expenses.
Additionally, spreadsheets cause several workflow bottlenecks. Each accountant working within their own documents, each with their own personal method, creates data inconsistencies and, later, audit problems. Spreadsheets don’t automatically enforce company-specific procedures and policies, and such widespread inconsistency creates additional work for reviewers and approvers to figure out each individual’s particular layout. This problem also wastes time and energy whenever a team member takes time away from work, leaving another colleague to fill in and try to decipher their setup. And, since spreadsheets don’t allow for a direct line of sight into your financial processes, there is very little way to determine the progress of your period-end tasks, in addition to keeping track of which team member is working on what task and when. This particular lack of visibility can lead to rework, when a team member performs a task out of sequence, then has to repeat it later when the numbers have changed. These bottlenecks, all due to the ineffectiveness of spreadsheets, can affect the timeliness and accuracy of your reporting.
New Technologies, New Tools
A BDO survey of CFOs in the fall of 2019 shared some interesting insights about how finance departments were shifting their mindsets to drive technological change in their organizations. 7 in 10 CFOs shared their plans to increase IT spending budgets, 54% cited digital transformation as a prime aspect of their 2020 growth plans and 58% of CFOs planned to increase their finance and accounting departments’ budgets. This means a large majority of companies are scanning the markets for newer technologies that are better equipped to handle their financial processes with automation.
While moving your process from spreadsheets to an automated solution may seem daunting, it is necessary to keep your financials accurate and timely as well as help your company grow and stay competitive in the market. Creating a control framework lowers your risk of compliance violations, and automating the workflow reduces bottlenecks and provides visibility into task statuses.
The Adra Suite streamlines your financial processes while improving the accuracy of your numbers and lowering your risk for non-compliance. Each solution seamlessly integrates with your pre-existing financial systems, such as your ERP, as well as communication tools such as Microsoft Teams® and Slack.
Adra’s automated solutions also simplify your compliance by automated tracking and documentation trails. In the reconciliation process, your team is allowed to focus on key accounts, removing human errors that are prevalent throughout manual processes by automating them and flagging any inconsistencies for users to review and approve. A dashboard allows leadership instant visibility into the status of your financial close, reducing bottlenecks and preventing wasted time and effort, by providing updates on the progress of each task and team member, as well as the overall close.
To learn more about how the Adra Suite can streamline your financial processes, read the Adra Suite brochure.
The Evolving Role of the CFO Series
Part 1: 4 Challenges CFOs Need to Be Prepared For In The Upcoming Year
Part 3: The Changing Role of the CFO
Written by: Ashton Mathai