The Modern Finance Function

Finance transformation is aimed at creating a finance function that can influence business leaders to make better business decisions. The two big factors to achieve this are speed and data quality.

Read how Justin Lake, the Director and Founder of Think Numbers, views the modern Finance function:

The role of finance is changing rapidly and there is absolutely no doubt that a lot of what is being done today by people will be replaced by software in a matter of years. The technology around AI, Machine Learning, Neural Networks and Blockchain are gaining more traction and are starting to enter applications involving the finance function.

Some of the key predictions by 2025, published by Deloitte in a report called ‘Finance 2025’ referred to some of the key trends including that transactions will be touchless due to automation and blockchain reaching deeper in finance operations. Another prediction is that there will be a much greater focus on insights and data will be moving to more real time, which challenges the traditional periodic cycle reporting that has driven the accounting profession since day 1.

What would this look like in a practical sense?

Potentially, running your business by having daily or weekly closing processes instead of waiting monthly, real time dashboards and algorithms that simulate insights based on different trends or similar experience that a highly trained accountant could provide. It could also mean cutting out many manual processes such as validating transactions with third parties or pulling data that would normally be extracted by an individual.

To remain competitive with other organisations in your industry, decision making will play a competitive advantage by having faster access to your financial information.

Firstly, there is no question that speed will play a big part in this future of finance, where the days of waiting for 2-3 weeks to determine your performance results will be gone. If you are working with finance processes that are extremely manual, depending on staff to send information around, or the manually reconcile accounts, this will play a major hindrance to achieve this goals soon.

Secondly, the quality of data plays a massive role whether this can be achieved or not. It’s not just ensuring that the transactions are being accounted correctly, this should be a given. But also that you have an exception management system setup so that any unusual transactions can be easily identified and can be rectified immediately. By having incorrect data by wrong classifications or accounting treatment, this will significantly slow down the benefits of your automation effort.

What does this mean for business?

Most organisations are operating their finance teams to run their businesses today so that they can report results, analyse and make decisions. To make step changes in their finance function processes, finance transformation programs are vital to achieve this by:

  • Reviewing the end to end processes to produce their results and removing bottlenecks
  • Reviewing the quality of their finance data and improving integrity to ensure more accurate decision making
  • Building the right technology platforms that will enable faster speeds and improved quality of finance data

Finance Transformations can take time to fully realise your overall vision. There are quick wins that can be delivered along the way through your journey and will depend on the problem you are trying to solve such as:

  • Faster reporting
  • Less manual effort
  • More accurate figures
  • Better insights

The first step to get your organisation ready for the future is to kick off your Finance Transformation plan and make this a strategic priority for your company. Having a clear vision of where you want to get in the context of the business you are in to is typically the most important step to get started. It is important that the focus of your transformation effort has a strong focus and not done on a part time basis.  It is also vital to ensure smaller projects or quick wins are being delivered in a agile manner, so that you can see and measure benefits for your transformation effort. However, it is vital that key people who understand the business and technology are part of this journey as well as people who can support you to drive results and change.

Justin Lake is the Director and Founder of Think Numbers, a specialist in helping organisations to achieve their Finance Transformation goals. Please visit Think Numbers for more info.