Over the past decade, finance leaders have been taking advantage of the developments in computing power, machine learning, and artificial intelligence (AI).
The focus has shifted from productivity to efficiency, and an increasing amount of time is spent on value-added activities such as financial planning and analysis, policy setting, operational risk management, and treasury.
The modern CFO bridges the gap between finance and strategy using state-of-the-art technology to make better predictions and manage data to drive business growth.
Read on to find out how you can do the same.
Here’s what we cover:
1. Let data drive your strategy
Data is one of your most valuable resources—if you know how to use, organise and interpret it, that is.
You can break this down into three main areas to work on:
It’s not just about having the tools you need to analyse data, but having the skills in-house to understand and interpret information to offer the kind of practical advice that allows you to make operational decisions.
Upskill and inspire your team to be curious, creative, analytical people who can monitor data, identify trends, and offer predictions on how to achieve company goals.
Offer support for learning and development to help your employees continue to refine their skills, keep up with the latest developments in tech, and add value to the business.
Just 33% of management accountants believe their organisations have effective strategies in place using the latest analytic techniques and technologies.
It’s crucial that you review and refine existing processes to make sure you and your team are working smarter, not harder.
There are three main technological capabilities to master to be a data-driven CFO:
- Automated financial operations
- Analysis of key metrics from every angle you need to view
- Data synchronisation with other systems in real time.
In practice: the benefits of being data-driven
Let’s say your organisation is looking for central administration and IT maintenance. We’re talking complicated reporting workarounds, inefficient accounting workflows, paper-based processes, the works.
Enter, cloud-based accounting software.
Your monthly close process is cut in half. You’ve got access to granular insights that make it possible to plan for your department more effectively. You could see a 40% increase in A/P efficiency and save around 120 hours every year on reports.
That’s time you and your team could work on fresh projects or business-critical processes.
2. Automate, automate, automate
An increasing number of CFOs are delving into the world of AI, machine learning, and robotics, says Alex Bant, Gartner’s chief of research.
“2021 is the year to pivot from discussions about the future to making real investments, seeing short-term wins and costs off-set, and having a clear plan for the future,” he says.
Automation is the modern CFO’s greatest ally. It has the power to increase productivity, knock down costs, and eliminate silos—and they’re not the only benefits.
Others include the following:
- Improves the flow of information through different departments
- Precision through AI-powered algorithms
- Works in real-time to speed up your financial processes
- Minimise human error
- Streamline processes
Automating standard accounting tasks frees up your time for more strategic decision-making and your employees’ time to drive innovation.
Automating processes means cutting down on—or cutting out completely—the time your financial services firm spends on things such as:
- Consolidating financial information in Excel
- Calculating revenue recognition in Excel after compiling information from sales and HR systems
- Manual data reconciliations
- Manual data re-entry between systems
- Processing vendor payments
- Manually routing paper approval sheets
If you’re already using automation, but want to step things up, consider changing your focus from low to high-end automation.
This means using machine learning and AI to handle and optimise capital allocation, financial planning, and auditing.
3. Go beyond the GAAP
To make the most of your data, you need to put the General Ledger (GL) at the heart of your data strategy.
The GL is packed with all the key financial information you need to create Generally Accepted Accounting Principles (GAAP) reports, including income statements, balance sheets, and financial ratios.
Your financial metrics need to align with wider business needs.
By enhancing the GL with non-GAAP statistical data, you can track and report on key metrics that reflect your company’s success in relation to your organisational goals.
This kind of multidimensional analysis gives you far better insights into your business.
Combining financial and operational data improves visibility across your organisation, which means better-informed decisions and collaboration across departments.
4. ‘Twitterise’ your chart of accounts
Being able to slice and dice your data—or add dimensions to your chart of accounts—brings that all-important simplicity to your data, with richer context to boot.
Think of these dimensions as hashtags on Twitter.
Hashtags are widely used as a form of user-generated tagging that allows for cross-referencing of content sharing a similar subject or theme.
They make it easier to search, sort, and organise your reporting data and to give context to what’s happening across your organisation.
Just as you can look at hashtags over time, you can analyse your financial reports over time.
Just as you can view real-time trending Twitter statistics, you can analyse your financial performance across one or multiple entities in a real-time financial dashboard.
5. Get all your data in one place, in real time
Real-time reports empower you to make more accurate predictions to help drive your business forward.
The impact of these reports goes does not stop at the finance department. It’s become an integral part of wider company strategies.
Your cloud accounting software should come with the ability to synthesise information from multiple data sources.
This allows for more informed analysis and better decision-making.
Look for solutions that come with Application Programming Interfaces (APIs). An API allows two applications to talk to each other.
Every time you use an app such as Facebook, send an instant message, or check the weather on your phone, you’re using an API.
In the world of finance, these are designed for real-time integration, so you can spend less time waiting for entries to be posted, and more time analysing that information.
Smooth integration with third-party apps is non-negotiable for the modern CFO.
Pre-built connectors to popular systems like Salesforce, Automatic Data Processing (ADP), and Bill.com make life easier for everyone, from your finance team to sales, to payroll and IT.
Success guide for financial leaders in financial services
Discover how you can drive strategy and performance at your financial services firm with data-driven decision-making.
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