In today’s competitive marketplace, thriving middle market companies that are thriving tend to have a robust continuous improvement culture, especially when it comes to the finance function. The finance department should be a strategic enabler and insightful advisor for achieving business goals, not just a back-office recording and reporting function. For many companies, requires a significant transformation that includes increasing automation, strengthening data and analytic capabilities, and improving controls to support the strategic direction of the business.
Organizations must employ leading practices and technologies that enable finance to move from the back office to a strategic innovator role. Without the correct level of support and a culture dedicated to continuous improvement and innovation, finance may be limited in its ability to assume this leadership position as a strategic partner to the business.
Some common challenges that can hold the finance function back from assuming this role include:
- Lengthy and burdensome close cycles: Difficult and inefficient processes lengthen the close cycle while squandering precious resources.
- Poor integration between systems and a lack of automation: Timely investments in new technologies can significantly reduce manual work while greatly improving efficiency and accuracy. This allows the finance team to spend less time focused on transactions and more time on valuable analytics.
- Lack of timely visibility into data for decision making: Achieving a shorter close cycle and employing automated and integrated systems lead to more timely access to results, enabling business leaders to use that information to make better strategic decisions.
How can you eliminate these issues and move your finance function out of the back office? A typical framework for improving the performance and perception of the finance function employs three key solutions to help overcome fundamental challenges and enhance the scope and effectiveness of the function:
- Finance area assessment: A first step in gaining operational improvements is to closely evaluate the department’s people, processes and technology. This can help establish a road map that puts the organization on a path to future success.
- Enhanced processes through automation: Using technology to automate the right processes can result in a 20 to 50 percent improvement in workforce productivity. Automating the close process can greatly reduce the risk of error and drive better alignment with financial controls.
- Financial planning and analysis (FP&A): Many organizations build FP&A plans that are too detailed with little attention to the bigger picture. Simplifying financial models creates significant efficiencies while allowing you to keep a close eye on precise performance measures.
To remain competitive in a rapidly evolving business environment, organizations must leverage the full potential of finance to drive more meaningful insights in support of strategic business initiatives. By focusing on enhancing the speed of the close process, improving systems and process integration, increasing insight to help make strategic business decisions and automating processes and controls the finance function becomes more valuable, increasing the success of the function and the overall business.