Transforming the finance department: is your enterprise trucking or trailing?

Decommissioning the spreadsheets and paper-based finance processes of yore is a common aim for Australian enterprises. The desirability of doing so was thrown into sharp relief last year when the COVID-19 crisis forced thousands of organisations to close their offices and send their finance teams home to work.

Those organisations that had streamlined their accounting operations and implemented access-from-anywhere cloud accounting software found pivoting to a new modus operandi relatively straightforward.

But for those who were heavily reliant on manual processes and legacy, in-house solutions, it was a somewhat different story. Research suggests there were plenty in that boat.

46% of enterprises globally experienced disruption, courtesy of the fact that manual tasks couldn't be completed in the office. Meanwhile, 41% had problems sharing paper-based documents, according to a 2020 FSN study. Meanwhile, restricted access to their on-premises finance platforms created headaches for a third of organisations.

Off the back of that experience, powering ahead with automation and digitisation has become a priority for finance leaders anxious to avoid being caught on the hop again, next time disruption strikes.

Here are some key benchmarks that can help you determine how well your finance transformation program is tracking.

How quickly you close the books

Is meeting reporting deadlines a perennial scramble? According to FSN, a whopping 97% of finance leaders globally have admitted to this being their biggest concern. If your company's end-of-period close takes more than five or six days to complete, then you're likely among them – and you have plenty of room to improve.

Robotic process automation can speed up the close process exponentially using intelligent technology to complete high volume repetitive tasks, without compromising on accuracy or compliance.

How much the finance function costs to run

Automation and digitisation don't just save time; they can also generate a serious saving within the finance department itself. Research suggests the average organisation spends 1.2% of its revenue on the finance function – on salaries, systems and sundry overheads. Among the inefficient, that figure rises as high as 2%.

Wholesale embrace of automation and digitisation typically slices the spend in half, with best in class enterprises dedicating just 0.6% of revenue to this cost centre. Crunching your numbers will help you determine where you're at and the potential extent of the savings to be had.

Whether you can rely on your reports 

How do you rate the quality of your financial reporting? For many senior finance leaders, the answer is likely to be 'poorly'. One Blackline study found that more than 55% of C level executives weren't confident in their organisation's ability to identify errors prior to reporting results.

That's concerning, given every business decision of any moment is informed by financial considerations. When automated tools replace manual methods, transaction errors tend to drop dramatically, making it possible to proceed with a high degree of confidence.

Whether your team can turn information into intelligence

Processing transactions is a bread and butter job for finance departments, but some can do much more than mere number crunching.

By virtue of their efficiency in getting the basics sorted, they can devote resources to planning and analysis — higher-level functions that can add real value to the organisation by helping leaders determine where savings can be made and growth is likely to emerge. If your finance team isn't yet contributing in this way, it's a sign they're still bogged down with the basics.

Supporting the enterprise in the post-COVID-19 era

Last year's pandemic was a trial by fire for many Australian businesses – and a wake-up call for finance chiefs who weren't well placed to keep calm, carry on and provide optimal support to business leaders.

Digitisation and automation can enable finance departments to become more flexible, efficient, accurate and economical. That's why ensuring your transformation journey stays on track will pay big dividends now and into the future.