Process Optimisation in the Finance Transformation era

Janine Chasmer
Janine Chasmer

The finance function has moved far beyond traditional financial reporting and bookkeeping. Finance departments worldwide are being called upon by their organisations to deliver more and in more diverse areas. This has led many teams to consider whether a finance transformation is needed to keep pace with changing business requirements. The question is, is it worth reimaging the entire finance function to achieve these goals?

The short answer to this is yes.

What are the benefits of finance transformation?

Although 85% of finance teams are currently undergoing or planning a finance transformation, many CFOs and their teams often fail at the first hurdle – they can’t convince other execs, investors and stakeholders of the benefits of finance transformation. The advantages can be split into two categories, short-term and long-term.

Let’s start by looking at some of the short-term benefits that organisations can expect to see:

  • Immediate access to more detailed and reliable financial data across the business
  • Faster business processes, including time to close
  • A single source of truth for all financial data
  • The ability to automate many manual finance tasks

The short-term benefits that an organisation can expect to see should be evidence enough to convince others of the ROI for finance transformation. But if there’s still murmuring, here are some of the longer-term advantages:

  • Improved collaboration between finance and other departments
  • Enabling finance to operate more proactively instead of reactively
  • Greater agility for the finance team and the overall organisation

These aspects stand to benefit the business as a whole, not just the finance department. The whole idea behind finance transformation is to align finance with a business’s overall strategy. You can discover more about how to address the challenges of finance transformation in our recent white paper here.

One reason why a lot of organisations choose to develop and implement finance transformation strategies is to overhaul ineffective and outdated processes.

The process optimisation challenge

Back-end processes can either drive or hinder a business. The role of finance transformation is to ensure that financial processes are effective and optimised to achieve better results in less time, without the need for manual intervention.

However, for businesses that have attempted to develop transformation strategies in order to optimise financial processes, there are several areas in which they commonly fail.

Lack of order to cash integration

If the sales function is not integrated with finance operations in an effective way, it greatly reduces the transparency of the sales pipeline. If this happens, the result is poor cash flow forecasting and order management, which also often means disgruntled customers.

Combining data reporting, spreadsheets and systems

Using too many different systems and platforms makes data reporting an increasingly manual process, as someone or a whole team needs to input, migrate and manage the data within those units. This means more room for human error, and therefore, inaccurate data then being presented.

Inefficient P2P (procure-to-pay) procedures

The role of PDP systems is to integrate the purchasing department with accounts payable. Manual processes, legacy systems and multiple data system inputs make this task incredibly inefficient and time-consuming.

Inaccurate budget planning

Data that is collected and managed from various sources in different ways results in delayed decision making, and poor management of accurate real-time information. This means budgets can’t be planned accurately and cost estimates are overshot.

Limited expenses integration

Expenses are often inputted and managed in spreadsheets by individual users or the HR team. This leaves a significant margin for error and what’s more, if the system is not integrated into other systems, it’s not effective at all. If a third party tool is deployed to alleviate the issue, the manual processing of data and end-to-end payments is then still required.

Time-consuming payroll

Data from HR systems or spreadsheets are often manual and therefore not time-efficient, which often results in human error. For businesses that outsource payroll, this adds further complexities from third parties and their own manual method of payroll management, which then also needs managing and checking from an internal HR person.

Poor accounts payable and accounts receivable processes

Alongside poor workflow management, substandard accounts payable and accounts receiving processes will only result in payments not being made on time or even at all, and payments not being received on time.

Laborious system upgrades

Businesses often deploy a new ERP (enterprise resource planning) solution to get around legacy systems. However, these upgrades can take several years to get up and running properly, and don’t always engineer the removal of manual processes. This means that organisations are unable to benefit from the new technology in the way they had expected.

Many businesses have faced these process optimisation challenges while undertaking finance transformation. Whereas the majority have leveraged ad hoc solutions that may specialise in the optimisation of narrow, individual finance and accounting processes to solve some of the issues faced, a full-scale finance process optimisation is more concerned with the end-to-end framework for fundamentally transforming how the finance function actually operates.

When technology solutions are deployed in isolation, it often results in more manual processes needing to be performed than before, due to a lack of true and effective integration. Unless an all-encompassing solution is adopted, CFOs can’t benefit from true process optimisation.

The role of technology

New technology is popping up on a regular basis, and they all promise to provide the tools necessary to achieve finance transformation success. RPA, AI, OCR and ML are just some examples of up-and-coming tech that’s facilitating process optimisation for businesses. Solution providers are using these technologies to fuel their finance transformation solutions for their clients. This type of technology can both eliminate manual processes and integrate with others to help organisations to reimagine and simplify their back-end finance processes. They also often require a smaller budget, fewer resources and less time than other, less-intuitive solutions on the market.

Niico, created by Equantiis, is an intelligent automation platform that combines innovative technology such as AI, ML, RPA and OCR to provide organisations with a single platform to support process optimisation, and the wider finance transformation strategy. True process optimisation is achieved through automation, which means employees don’t have to perform repetitive manual tasks, and can instead provide more value to the business – saving valuable costs, time and resources.

For CFOs looking to transform their finance department without undergoing any major changes to existing programs or systems, with a solution that can be up and running within 30 days, book a free demo  to learn more about the Niico platform.

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More about the author

Janine Chasmer
Janine Chasmer - Principal Consultant

Janine’s career includes 10 years in the not-for-profit sector, specifically within membership, and she leverages her industry expertise and first-hand experience with a wider range of clients, including Membership and Charity, where she provides consultancy on a range of areas including Business Strategy, Customer Experience improvement and process optimisation. In recent years, Janine has applied these consulting skills to the Education sector, supporting HE and FE institutions to improve their applicant and student experience at key phases such as application, enrolment, Clearing and progression. Other projects include Digital and Data Strategy, process and automation, and Student Journey optimisation. She has also worked as a SRM Functional Consultant, using this unique insight of both sector knowledge, and enabling technology to achieve transformational outcomes. Janine is also a regular event speaker and creates and shares industry and sector insights with her network.