Finance teams across the globe are spending a mere 17 percent of their time on strategic work. That’s according to a recent CFO Indicator Report by Adaptive Insights. And it shouldn’t be a surprise to anyone who works for or with finance groups, who repeatedly hear staff say “I’m slammed, we’re closing!”.
Accounting teams are perpetually stuck in that closing loop. Each month, quarter, and year, the deadline looms to close the books. And if anything goes wrong, they’re in for a big manual exercise, like trying to figure out why the accounting system cash balance doesn’t match their actual cash balance. When you’ve got 10,000 invoices per month to collect, that’s a lot of searching through transactions.
And they have other responsibilities besides closing the books, like budgeting, forecasting, tax reporting, and executive-level reporting. All these activities must be done. Sometimes the work requires exporting data from multiple systems to get exactly what they need. So it’s a time-suck, and it’s not generating revenue for the business. All these factors turn the finance department into a cost center.
So how can finance groups turn the tables and add value? Here are our recommendations:
Look for ways to automate manual tasks.
Many businesses start out with a series of manual processes. When the business is small and funds are tight, it makes sense - for a little while, anyway. But as the company grows, the benefits of switching to automation win out.
Consider the case of Amazon. Yes, even the behemoth Amazon was using manual entry in spreadsheets for reconciliation! Can you guess how long it took them each time? 15-20 days - just for reconciliations.
Amazon started the move to automation with a batch of 16,000 reconciliations, and then expanded to complete 80 percent of reconciliations via automation. With the newly-adopted automation features, it takes them just ONE HOUR to perform reconciliations.
If Amazon can automate manual tasks to reduce their workload from 15-20 days to one hour, imagine how much time your business could save.
Related: Amazon on End to End Financial Close Management (Part 1)
Integrate critical systems to connect data sources.
In order to fulfill their duties, finance staff often require data from disparate systems. When these sources aren’t connected, it’s a real problem. The Adaptive Insights report finds that 60 percent of CFOs point to lack of data integration as their biggest stumbling block.
Let’s say you need to present a financial report to board members. Data for this report lives in various places, like an ERP, an accounting system, and a spreadsheet. In order to pull it all together, someone must export data from the two systems and match up three data sources - an error-prone and time-consuming process.
When evaluating software platforms, finance leaders must look at each system’s ability to connect with other critical systems. Are there pre-built integrations that allow them to make direct connections? If not, are there development resources internally that can build custom connections? Laying the groundwork for a connected platform with all data sources can reduce countless hours of manual work.
Use data visibility to support the financial health of the business.
As you explore opportunities to move your time investment from low-value to high-value work, think about the levers you have to help the business grow. Much of the support you can provide will be to point out where the business is struggling.
In your financial view of the data, you might spot issues that other groups just don’t have the time to investigate. Maybe your business has specific payment terms that customers aren’t meeting. Let’s say the terms are NET 30, and the average is closer to NET 90.
Instead of just sitting on this information, meet with sales leaders to share the data and offer to help. Would switching to quarterly rather than monthly invoicing speed up the payment time? Are your payment methods too out-of-date? What support could you offer to speed up payments and positively impact cash flow?
These types of interactions will greatly impact the entire business and show the finance team as the proactive, strategic partner it should be.