The future of finance

finance

How the finance function is evolving to provide greater value to organisations in the future was a key topic of discussion at the recent BlackLine APAC user conference in Melbourne, with BlackLine founder and CEO Therese Tucker and Deloitte Australia partner Greg Haskins speaking about the road ahead and the opportunities created through disruption in accounting and finance. Freya Purnell reports.

 

As technology provides the means to automate and standardise repetitive or low-value tasks, finance professionals now must think about where they might be able to create advantage for their companies through more strategic activity.

“Many years ago, when accounting was done by hand, if you had great accounting, that was a competitive advantage for a company. That has really changed quite a bit as accountants have got buried in their process,” says Tucker.

“I think the future might be a return to the past, and an accountant who is actually analytical, who is embedded in the business, who can see a little bit further out, becomes a true value-added partner with different business units.

“That’s not quite where we are at today. But in the best of outcomes, that gives a lot of job satisfaction to the accountant – it takes away the ‘grunt work’ they are doing and gives them important work.”

Haskins says technology is changing how finance is delivered through process and people, and business is already demanding more from finance. The CFO of today is expected to play four diverse roles. The two traditional roles are steward – that is, being responsible for preserving the organisation’s asset by minimising risk and ensuring the books are accurate – and operator – running an efficient and effective finance operation.

“Collectively those two roles actually form the core business of finance. It’s the production engine; it’s the stuff we can’t get wrong. Finance at a minimum has to produce those numbers,” Haskins says.

But increasingly, organisations are looking to CFOs to be strategists, helping to shape the overall strategy and direction, and catalysts, helping other parts of the business perform better by stimulating the right behaviours and encouraging a financial mindset.

“Where we find a lot of finance teams are spending their time is around the production of information – that steward and operator role that consumes most of our time in finance. Not surprisingly, most finance leaders and their teams would much rather be spending more time in the catalyst and strategist roles delivering value, being proactive and relying on automated information to be produced,” Haskins says.

Because the customers of finance don’t value the time it takes to compile financial information, being able to use tools such as BlackLine to automate and streamline standard processes is “quite exciting for accountants”, he adds.

Despite the potential of these tools, the finance function has a reputation for being married to Excel and other manual systems. Tucker says this is often because accounting and finance is seen as a cost centre, so they struggle to get funding for new solutions, as well as to find the time to evaluate other options.

“They are very overworked, and so getting their heads up out of the day-to-day processes to actually look at solutions that are more strategic is a difficult thing to do,” says Tucker.

When it comes to the hard numbers around calculating ROI on an automation solution, it’s perhaps not surprising that finance functions can find a number of different ways to justify the investment– time and labour savings, reduced storage, even simply the cost of paper.

“One of our customers said they have 10,000 that they reconcile each month, and a reconciliation is on average five pages long. If they don’t print just once because of this system, that’s 50,000 pages a month, and at 10 cents a page, that’s $5000 a month,” Tucker says.

Reducing the ‘grunt work’ load can also be an important talent retention strategy, according to Haskins.

“Generally the best talents in finance don’t want to be working on menial tasks,” says Haskins.

And of course, if there have been any financial irregularities or issues, there is a much stronger case to invest in a solution that may help to mitigate against those risks.

“The customers that move very quickly are usually those who have just gotten some very bad news from their auditors, and they call and say, I need it right now. The ROI on risk mitigation is enormous,” says Tucker.

Just as we are seeing analytics and business intelligence increasing in importance across many areas of the enterprise, having strong reporting capabilities is also critical for CFOs, as they look to take on those more strategic roles.

“The ability to produce information in real time is what make it actionable. [Companies] really have different views and ways of slicing and dicing data that they really need within their own organisation. We use BusinessObjects, and having a very powerful report writer embedded into our application is definitely an advantage for our customers,” says Tucker. “When you start to get information produced and collated and presented in useful ways, it really does provide a whole variety of new opportunities for running the business itself better.”

For organisations that want to take a step towards this finance function of the future, expect to do some change management, and take a stepped approach, says Tucker.

“Before you can ever automate things, you have to standardise. If you’ve got 5000 different versions of a spreadsheet, you are not going to be able to automate that. So step one is to essentially get your arms around what it is that you are doing, standardise that process, automate that process, and then reskill your employees so that they can actually provide the value-added activities that make [the technology] a good investment for you.”

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