Finance
Has Finance Given Up on its New Year’s Resolutions Already?
Global Banking & Finance Review®
Company
By Annabel Sim at Compleat Software
With everyone getting fully in the swing of things in 2022, it’s time to reflect on the first few weeks of our New Year’s resolutions – and not just in our personal lives.
In the finance function, there are still plenty of systems and processes that are lagging behind where they should be. Paper documents stuffed in filing cabinets and staff crunching numbers in Excel spreadsheets are still all too common offences.
The new year offers a perfect opportunity to take stock and highlight areas of improvement, and a New Year’s revolution might well be needed.
But with research suggesting around 43% of people give up on their resolutions by February, is there any hope for change in the finance department?
Although sometimes tough to achieve, New Year’s resolutions offer a good way of thinking about what we would like to do differently and how we can better ourselves over the next 12 months.
Looking back over the past couple of years, a lot of personal resolutions have involved slimming down after months of lockdown measures and self-indulgence. But there have been similar changes at a business level that could also use a bit of a trim themselves.
The three resolutions for finance
According to Eurostat, 80 percent of businesses in the EU are still sending paper invoices. That’s despite regulations such as Making Tax Digital having been in force for most businesses for some time now, and all VAT registered businesses by April 2022.
Mundane, manual processes continue to plague the finance department, adding vital time for teams who are already under strain to provide better visibility and control over a company’s finances. It also adds unnecessary risk from human error, fraud, and cyber attacks, all of which could be solved through implementing technology into processes.
Businesses need to start trimming the fat by embracing automation and leaving spreadsheets and paper invoices where they belong – in the past. The use of technologies such as automation, AI, and Machine Learning are providing businesses with benefits that go beyond the finance department and straight to the bottom-line.
To give a rough idea, if we say one member of a team responsible for entering invoices into the accounting system costs £10 per hour, and it takes them 10 hours every month, it therefore costs a business £1,000 every year just to enter information into a system.
In terms of ROI, if businesses can implement automation for below this annual cost, such as as-a-Service or cloud solutions, it’s already paid for itself. They’ll also free up one day of staff time every month to focus on more important tasks that require a more personal touch or critical thinking, such as financial reporting or customer/supplier relations.
The lack of technology in finance departments is also becoming detrimental up the chain for CFOs and finance leaders who are desperate to gain better insight into financial reporting, but lack the tools required to do so.
Businesses have long been playing catch-up with their own resources and finances, blindly reporting on historical data that bears little to no relevance to what’s coming round the corner – especially if we’re to witness any more black swan events in the future.
Finance departments therefore require technology that can provide better data-management and guide the collection, storage, and analysis of the massive amount of data needed to perform the types of reporting and forecasting that modern businesses require now.
The central role of the finance function puts it in the perfect position to utilise and analyse data. Whether it’s for scenario-based planning that can provide better decision-making or insight into how to better manage and control external purchases, finance must be able to gain access to real-time, accurate data from all areas of the business.
This year, finance needs to stop looking in the rear-view mirror when planning for the future and start utilising data and technology that can help better prepare it for whatever comes its way.
As remote or hybrid working becomes the long-term strategy for staff rather than a stop-gap measure to handle the fall out from the pandemic, businesses need to embrace change and better empower remote finance teams.
It’s no use trying to force staff back into offices either, with many willing to leave their current role if flexible working arrangements aren’t offered. Staff are reluctant to five up the freedom they enjoy in their day-to-day roles now, especially as productivity remains unaffected.
For finance teams, this means adopting technologies that provide better, real-time collaboration. One survey found remote work and virtual collaboration (48%) was listed as the second highest priority for finance teams, just behind big data and advanced analytics (55%).
If remote working is to remain and be successful, businesses need to support teams with new processes and systems that can properly accommodate this. Staff might be working different hours than when in the office, and it can be much harder to gain visibility into which tasks colleagues are currently working on.
From raising purchase orders and integrated online buying, to automated invoice data capture and digital procurement, businesses need to provide digital solutions that meet the fast-paced demands of remote working life.
And they most likely need to be Cloud-based. We’re still far from working from the beach, but if businesses are to fully embrace remote working then staff need to be able to access platforms from any device and from any location.
New Year’s revolution
There have been plenty of cases throughout history of businesses that have suffered as they failed to adopt and adapt to new technologies. have suffered as a result. Nokia and Blackberry missed the smartphone movement, while Kodak couldn’t keep up with the digital revolution.
In an age of new working environments and processes, businesses that miss out or simply ignore the fundamental benefits of new technologies are only putting themselves and their staff at risk.
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