The Changing Role of Finance and Accounting
Your business is growing—congratulations! In a sink-or-swim environment, you’ve managed to not only survive, but thrive. Be proud! OK, not so proud that you get too confident. After all, the tide never stops rising, so it’s probably worth giving some thought to what lies ahead.
Now you must answer some key questions. What are the most important roles the finance and accounting organization should serve within the company? What are your top priorities this year?
The Berkeley Research Group, a global consulting firm, had the same questions and set out to get some answers. In an online survey of more than 120 finance executives, BRG Corporate Finance asked about key business challenges, top priorities and important roles.
Moving Beyond Financial Close
The big takeaway: The office of finance and accounting’s role must continue to evolve to place less emphasis on transaction processing and more emphasis on driving performance improvements within the business.
According to the survey, the three most important roles finance and accounting should serve within a company are:
- Budgeting and forecasting
- Identifying opportunities to improve the business
- Executing company strategy
The traditional task of closing the books and reporting financials came in seventh place out of 12 roles. If your team is spending most of their time on the financial close, the new research provides some food for thought.
For example, does your team still rely heavily on manual processes to close the books? Do they primarily use spreadsheets and paper binders to manage the close? Do they share important information via off-the-cuff emails?
If you answered “yes,” “yes,” and “yes,” you’re not alone. Finance and accounting staffs are notoriously overwhelmed by day-to-day details that, while important, detract from their ability to consider the big picture and plan for the long term. In fact, the BRG survey revealed that the biggest challenge finance executives face is that processes are highly manual.
Such a scenario is particularly prevalent—and, indeed, pernicious—at growing organizations where legacy approaches can suddenly become outmoded and undermine objectives. For example, as operations expand and sales increase, the office of finance has to process more transactions, manage more accounts, and integrate data from more sources. Employees then naturally end up working more hours. Spreadsheets naturally become bloated, overly complex, and more prone to error. And communication inevitably breaks down.
Enabling Strategic Objectives
In a nutshell, your finance organization may be tackling 21st century challenges with 20th century tools — spreadsheets, emails, and other manual methods of stitching the financial close together. Or, in the parlance of Hollywood, you’re bringing knives to a gunfight. (Good luck with that!) As a result, it’s difficult to play a more strategic role within your firm while also executing core processes and their numerous underlying activities.
However, there’s another way. Emerging technologies can modernize the finance function by automating routine tasks—for example, time-consuming aspects of the financial close, such as transaction matching and balance sheet reconciliations.
Finance executives have a difficult balancing act. Their business partners expect them to be trusted advisors in enabling growth while also meeting the demands for reliable business intelligence. The investment in technology is key to walking that tightrope, the Berkeley research found.
To learn how Protector Insurance was above to use technology to their advantage during the financial close, read their case study.
Learn how the Adra Suite of Solutions can help you simplify your finance and accounting organization. You need to get back the time you need to perform the tasks that are truly valuable to your organization before it can grow competitively!