The role of the finance team is changing. It is possibly having its biggest shift now because of the penetration of automation in organizations. From bookkeeping and number-crunching, finance is shifting toward a more strategic and advisory role. Plenty of tools available in the market enable this change.
Traditionally, the finance team is responsible for maintaining accurate financial data, controlling costs, and tax compliance. Today’s software tools take care of this quite easily; rather than simply processing and managing data, they add real business insights. As a result, finance teams are no longer shackled by the drudgery of manual and tedious bookkeeping processes. They’re free to focus on taking an active, strategic role in finance automation.
This entails accountants and finance teams becoming more strategically aware, learning new skills, and delivering actionable insights. Now that we see the finance cloud accelerating this trend, how can finance teams and CFOs leverage this to drive more growth?
The changing shape of the finance function
According to the CGMA, the shape of the finance function has evolved from the traditional triangle, to a segregated triangle, to a hexagon in the digital age.
The triangle implies a hierarchical structure with the data entry and extraction staff at the broad base and a few senior management roles at the top. The advent of globalization and leaps in information and technology in the last decade allowed daily, manual finance processes to be migrated to shared service centers, while finance leaders operated independently. The segregated triangle indicates this disconnect. The hexagonal shape shows the impact of automating data-assembling tasks.
The automation of repetitive tasks through rule-based logic or integration capabilities in accounts receivable and accounts payable functions means that fewer people are required to perform entry-level tasks.
It’s not implausible to think of finance teams with no one in them in the future. As finance process automation expands across different functions, the core finance team shrinks. However, this does not spell the end for finance teams. The data demand from within the organization requires faster and flexible finance teams that are facilitated by adopting an automated approach to accounting.
A more active role
As the basic finance activities are now automated, the team’s functions emphasize on management rather than accounting. They have a unique end-to-end view of the organization’s financials and can work alongside senior management and leadership teams. There are a few possible ways the finance function could change:
- focusing on reporting and compliance
- identifying strategies and opportunities
- providing critical information and analysis that impact financial decisions
- implementing cost-saving measures
Finance teams can build a framework that enables the leadership teams to allocate resources toward investments that drive long-term profitability. Instead of looking at historical data, they can make proactive forecasts that support growth. It also lets them build close relationships, both inside and outside the organization, so they can focus on improving the process efficiency, eliminating bottlenecks, and ensuring data integrity.
Keep pace with technology
The first step in leveraging this change and becoming a driver of strategic innovation is to stay on the cutting edge of big data and technology. As this rapid change continues, businesses need to invest in training their employees in recent technological developments.
Enterprise mobility is one more thing businesses must focus on. It’s become absolutely necessary to have access to information from anywhere, anytime. In fact, the enterprise mobility market size is predicted to hit $73.3 billion in the next two years.
The key to transformation
The function of the finance team will continue to change in the future as software tools become more and more intelligent. It’s essential to keep pace with the changes and find the means to contribute value in ways systems can’t.