A year ago, finance departments were urged to digitise; today, market participants have been forced to embrace the essential.
CFOs and financial directors have led their organisations through a difficult financial landscape, but stronger technology is essential for businesses to survive and thrive. However, Christoph Dubies, chief strategy and transformation officer at Serrala, explained that many departments are still working with fragmented, disconnected systems.
“Without systems that efficiently connect finance to banks, customers, suppliers, and other external business partners, processes become more complex and time-consuming,” Dubies said. “This is one reason why so many finance departments continue to rely on spreadsheets.”
In a digital-first world, it is important that finance departments keep pace and modernise their processes. Electronic invoices, payments, and automated cash-related processes will all help streamline cashflow and keep supply chains strong, far beyond 2020.
Automation can help facilitate this, with a 2020 Gartner report indicating that a single bot can complete up to 30 times the amount of work of a full-time human employee. With some organisations having made staffing cuts and furloughs, it is clear that time is a valuable asset for the finance function to invest in.
“Companies need the ability to achieve first-class visibility, to keep the money coming in, and to control and have a better appreciation for what’s going out,” Dubies said. “And there’s not a single bigger issue in finance right now than that.”
However, the finance function has truly faced an uphill challenge in the first half of 2020. Coronavirus placed a spotlight on business leaders, both internally and externally, as they navigated the pandemic’s economic difficulties.
Moving forward, Dubies advises that to further safeguard the organisation, finance leaders should launch and stabilise their company’s ‘CFO Playbook’ for the coming months.
Some of the key concerns for FDs today to address in their playbooks are cost reduction, managing operations remotely, cashflow and liquidity transparency, and credit risk management—all areas that automation can bolster.
A McKinsey report found that 44 percent of the finance function had automation potential, particularly within data collection and processing. Looking at the future, these areas will continue to be critical to business survival, and Dubies advised businesses to consider using automation for more processes ahead of future concerns or crises.
“Companies that are concerned about the future need to think strategically about how they want to optimise their processes to create a stronger, more resilient company,” Dubies explained. “Then, they will need to make smart technology decisions that will support their process roadmap.
“Take a long-term view and consider measuring the value or importance of any process changes by more than simply speed or cost—consider soft benefits, too.”
While automation is lauded for its efficacy and time-saving capabilities, its use by financial professionals should not be underestimated. Repetitive, rule-based tasks can be automated, and with the introduction of a more complex ‘intelligent automation,’ so can more complex tasks.
There is a human element to automation, particularly for involved processes like managing disputes or assessing credit risk. This presents a unique opportunity for financial professionals to not only upskill the organisation, but to lead the finance function into a future-proof position.
“When we create this capable finance team, and we have transparency through transactions and processes, then what we see is that stabilisation reduces complexity and the potential risk—not just from fraud or security, but from a business model perspective as well—is minimised and overall process cost is reduced,” Dubies said.
Although coronavirus was an unexpected hurdle, it has presented finance professionals with an opportunity to reimagine the function and emerge from the pandemic stronger than before. As Dubies said: “This is the moment to plan for change.”
For businesses looking to shift to automation, Serrala covers all-in-one order-to-cash and procure-to-pay cycles, as well as financial management-related data and document management processes.