Embracing the power of finance – looking to the cloud

By Andy Bottrill | 1 November 2016

Weak economic growth and global insecurity due to the impact of Brexit are contributing to a climate of general business uncertainty. In this context, it isn’t surprising to find that Deloitte’s 2016 CFO Survey shows a shift to defensive strategies on the part of chief financial officers of the UK’s largest corporates.

Confirming the tendency to favour defensive strategies in times of turmoil, research conducted by BlackLine reveals that if faced with an economic downturn, around a third of business decision-makers in the UK declared they would rather an ex-finance chief or an ex-accountant run their business. Responses suggest that due to the changing economic climate, businesses are now looking to CFOs to provide more strategic direction and to steady the ship in difficult times.

The notion that finance teams can contribute to the growth of the business beyond their role in financial management is not new, however, the lack of time and resources often comes in as a hindrance – with time all too often spent focusing on reporting and month-end processes. When asked, half of UK business decision makers highlighted a feeling that their financial teams typically have an overly taxing volume of work.

With a shift in strategy needed to recover from periods of economic turmoil, the current environment could be a tactical turning point for businesses to find new ways to generate savings, and boost the returns gained on back end processes.

With capital expenditure, hiring and discretionary spending all expected to decrease in the coming 12 months, any new investment will be carefully scrutinised. A renewed focus on balance sheets, limiting errors, improving the speed of reconciliations, and securing intercompany accounting will be the building blocks of recovery and future return to expansion. Turning to cloud technology can be a valuable first step to get ahead of the curve. However, standardisation remains elusive for many organisations, from SMEs to multinational businesses. How then, can businesses break out from the disparate and expensive ERP environments that are fracturing their operations, and steer toward a more standardised approach?

FSN’s 2016 Future of the Finance Function Survey suggests that the best way to mobilise change is through the cloud. CFOs recognise the advantages of the cloud in regard to cost, agility, and ease of implementation. Process standardisation is often the starting point to streamlining the chain of decision making within businesses, and improve responsiveness to market changes. 

Standardisation and automation of repetitive processes such as account reconciliations, transaction matching and task management can typically increase efficiency, but also tighten controls by eliminating spreadsheets, and limiting the potential for human error – all of which are necessary elements to speed up recovery. Going through these changes, British Gas for example saw rapid benefits. Not only were account reconciliations going faster than ever before, time savings were significant: British Gas calculated an initial return on investment at more than three and a half full-time equivalents.  

The benefits are so sensible and strategic that the organisations that first implement these processes gain a competitive advantage. An automated process that is repeatable, organised and transparent reduces your exposure to risk and provides confidence in the reporting outcomes. The resulting efficiency and effectiveness free up your accountants to focus on analysis and input, which is the reason they pursued this profession in the first place.  

By making more efficient and productive use of accountants’ time and valued work, CFOs, controllers, internal audit and the accountants themselves are better able to achieve the company’s strategic objectives at less cost. The scalability of the cloud ensures that more individuals from within the organisation and in different functional areas can collaborate, enabling a new level of knowledge sharing, decision making, and strategic alignment.

Business leaders now recognise that accounting departments overall are undervalued in their role in the business, with over a third of respondents accepting their financial teams are an underutilised resource. Businesses of today cannot afford to have the finance team and CFOs tied up with overly taxing volumes of work.

To unlock the value of an accounting team, businesses need to provide the right tools that can automate the tedious manual work such as processing and reporting, and allow accountants to focus on high-value areas including fraud detection, compliance, and data analytics.

With more time to play a larger role in achieving business success, rather than battling data and outdated excel processes each month, this culture change towards embracing cloud-based solutions is set to arm finance teams to become today’s CFOs and future CEOs.

By Andy Bottrill, Regional Vice President, BlackLine

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