Whether it’s Brexit, a surprise result in the US Presidential race or a snap General Election here in the UK, tumultuous geopolitical events in recent months have fostered a climate of currency fluctuations, volatility and business uncertainty.
When the financial chips are down it’s only natural that large corporations will adopt more defensive strategies, and look to their CFO to shepherd them through difficult terrain. However, in order for CFOs to achieve this, they need to be both suitably empowered and equipped.
This is where cloud-based solutions can play a pivotal role, providing CFOs access to all the data available to them whenever it is needed, rather than at the traditional month-end reconciliation period. If CFOs have access to the right insights and figures in real-time, they’ll prove a far more effective asset in steering businesses through more perilous economic straits.
A burdened finance department
When we queried UK companies on who they felt was the most appropriate leader during tough economic times, the majority said they’d trust an ex-finance chief to sit in the big chair. This sentiment was similarly shared by business decision makers in the US, France and Australia.
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This all makes a lot of sense really. CFOs and finance teams have the economic credentials and nous to steer a course where others, perhaps, may not. The appropriateness of finance departments to contribute to the strategic direction and business development is nothing new of course, but our research also revealed that, despite business decision makers recognising the additional value of finance teams in the current economic environment, they were unable to utilise them effectively.
As with many business stumbling blocks; the key causes are a lack of both time and resource. Finance teams are too busy focusing on the meat and veg of their roles – month-end processes and reporting – to contribute meaningfully to more strategic tasks. Over a third of UK business decision makers admitted as much.
If businesses are to take a proactive stance in recovering from times of financial uncertainty they’ll need to discover new tactics to generate savings and boost returns from back-end processes. Two areas where it’d be useful to have financial experts on hand rather than bogged down in rote, repetitive tasks.
Standardisation in the Cloud
Freeing up financial professionals to concentrate on strategic business goals will require a systemic change in the day-to-day role of the finance department. However, as businesses tighten their belts over the next 18 months there’ll inevitably be a greater emphasis on the bottom line, reducing errors and accelerating the speed of reconciliations. All jobs that sit firmly within the remit of the finance department.
This is where the cloud comes in. As FSN’s 2016 Future of the Finance Function Survey highlights, the cloud has the ability to mobilise change as well as provide advantages over disparate and pricey ERP environments in terms of cost, agility and ease of implementation.
If finance teams are working across multiple interfaces and systems to amalgamate data for a financial close then they’re wasting valuable time, resources and impacting the online traceability and audibility of transactions from the financial accounts back to their original systems.
On the other hand, a cloud platform can facilitate the delivery of data from multiple systems, introducing standardisation across processes, applications and vendors whilst reducing the complexity of amalgamating activities and transactions.
The cloud also provides additional benefits for business by breaking down organisational silos. Through its scalability, multi-departmental collaboration becomes a far easier task and fosters a new level of knowledge sharing, decision-making and strategic alignment.
Automation and the Cloud
When processes, vendors and applications are all standardised in the cloud it becomes a much more fertile environment for automation.
The business cases for automation are many-fold. An automated process that is repeatable and transparent reduces exposure to risk and bolsters confidence in the reporting outcomes. With businesses concentrating on faster reconciliations and mitigating errors, an investment in automation offers the one-two punch of providing this extra speed and accuracy by eliminating spreadsheets, alongside liberating finance teams to focus on the business strategy tasks needed for growth.
Additionally, as reconciliations occur in real-time, the CFO has real-time insights into the company’s financial position to inform business decisions and take advantage of opportunities before their competitors.
Unlocking the potential
Business leaders are waking up to the fact that their finance teams are being under-utilised, and their potential to offer tangible business benefits is going to waste, as they trawl through spreadsheets and focus on the daily grind.
If business leaders are to unlock the nascent potential of their finance teams they need to equip them with the proper tools to unburden them from the yoke of repetitive tasks and manual reporting. Standardised processes and automation in the cloud allow finance teams, CFOs and Controllers the freedom to tap into their wider skill sets and focus on higher-value areas including fraud detection, compliance, and data analytics.
With the current political landscape, it’s near impossible to see what’s around the corner, and this uncertainty will play its part in the wider economic environment. If businesses truly feel that its time for CFOs is to step up to take the reins, a shift towards embracing cloud-based solutions would be a pretty good starting point.