Real-time visibility of data elevates the role of finance

Hav­ing lagged behind oth­er func­tions in dig­i­tal trans­for­ma­tion, finance and account­ing teams felt the pres­sure of inef­fi­cient, man­u­al process­es more than most when coro­n­avirus forced the world into remote-work­ing mode. Before the pan­dem­ic, only 9 per cent of com­pa­nies had trans­formed their finance func­tion with automa­tion, accord­ing to research from FSN. Many dis­trib­uted teams have, there­fore, had to deal with paper-based doc­u­ments and office-bound tasks that are sim­ply no longer fea­si­ble.

Chief finan­cial offi­cers (CFOs) and their teams are under enor­mous strain. On the one hand, the need to adapt to pan­dem­ic dis­rup­tion has increased reliance on accu­rate, up-to-date finan­cial data. On the oth­er, it has also divert­ed bud­gets which might have been used for finance improve­ments to cus­tomer-fac­ing sys­tems, per­pet­u­at­ing a decades-long imbal­ance that has imped­ed back-office invest­ment. Paper-based doc­u­men­ta­tion slows per­for­mance and ramps up risk, since files must now be copied or scanned and sent as attach­ments.

“This may be fea­si­ble in a small com­pa­ny, but it adds dan­ger­ous lay­ers of com­plex­i­ty in medi­um or large-scale finance and account­ing oper­a­tions. Before COVID-19, man­u­al account­ing was not sus­tain­able, now it is unten­able,” says Marc Huff­man, chief exec­u­tive of Black­Line, whose cloud-based solu­tions trans­form finance and account­ing by automat­ing, cen­tral­is­ing and stream­lin­ing key process­es. “The impact could have been soft­ened had com­pa­nies already dig­i­talised process­es, but few have ful­ly addressed the finance automa­tion gap.”

In a recent sur­vey by Black­Line, just 29 per cent of C‑suite exec­u­tives and finance and account­ing pro­fes­sion­als felt con­fi­dent in the accu­ra­cy of their finan­cial analy­sis and fore­cast­ing data. This is despite a third of respon­dents believ­ing the pan­dem­ic has increased pres­sure on them to pro­vide an accu­rate pic­ture of com­pa­ny per­for­mance.

Find­ings sug­gest that while busi­ness­es now recog­nise the crit­i­cal role finan­cial data has to play in inform­ing busi­ness strat­e­gy and con­ti­nu­ity, poor vis­i­bil­i­ty and a lack of access to real-time data is hin­der­ing the abil­i­ty to respond to volatile mar­ket changes. Four in ten respon­dents said the finance team is increas­ing­ly being called on by the board to pro­vide insights that help with sce­nario plan­ning, yet 28 per cent were wor­ried they are not able to pro­vide data quick­ly enough for the com­pa­ny to respond to mar­ket changes.

The lack of vis­i­bil­i­ty – 27 per cent of C‑suite exec­u­tives said they have none at all into finan­cial sce­nario plan­ning or stress test­ing – means busi­ness lead­ers are often mak­ing deci­sions based on an incom­plete pic­ture of their organisation’s finan­cial health. It is also under­min­ing trust in the data used for key finan­cial process­es and plan­ning, with only 56 per cent of C‑level exec­u­tives con­fi­dent in the accu­ra­cy of their company’s finan­cial data. Accu­ra­cy is hin­dered by a reliance on clunky spread­sheets and out­dat­ed process­es that leave finance and account­ing team mem­bers in the dark until month-end.

“Man­u­al tasks, inef­fi­cient process­es and a lack of data insights are hold­ing back finance func­tions and pre­vent­ing them from com­pet­ing effec­tive­ly in a tumul­tuous mar­ket that has been upend­ed by COVID dis­rup­tion,” says Huff­man. “In the end, the pan­dem­ic is bring­ing to the fore­front what we’ve seen for years. The ques­tions and sce­nar­ios might change, but the answer is the same: man­u­al account­ing process­es are unsus­tain­able.

“Com­pa­nies often strug­gle to advance dig­i­tal trans­for­ma­tion in the finance func­tion as they fail to link process change with the most advan­ta­geous out­comes of automa­tion. To achieve the full val­ue, they need to be pre­pared to chal­lenge and reimag­ine hard­ened account­ing process­es. It’s cru­cial to engage every lev­el of the organ­i­sa­tion to embrace dig­i­tal­i­sa­tion rather than fight it. COVID-19 has high­light­ed the impor­tance of an effi­cient, auto­mat­ed finance func­tion; com­pa­nies must now address this or risk
falling behind.”

A third of BlackLine’s sur­vey respon­dents said devel­op­ments caused by the pan­dem­ic have made peo­ple at their com­pa­ny val­ue real-time access to finan­cial data more. The oppor­tu­ni­ty is there for finance organ­i­sa­tions to lever­age the renewed urgency COVID has cre­at­ed around dig­i­tal trans­for­ma­tion to accel­er­ate their automa­tion aspi­ra­tions.

BlackLine’s cloud-based solu­tions enable com­pa­nies to move to mod­ern account­ing by uni­fy­ing their data and process­es, automat­ing repet­i­tive work and dri­ving high­er account­abil­i­ty through vis­i­bil­i­ty. They allow large enter­pris­es and mid-sized com­pa­nies across all indus­tries to do their account­ing work bet­ter, faster and with more con­trol, shift­ing resources from just get­ting the job done to telling a com­plete sto­ry, and enabling them to focus on strate­gic deci­sion-mak­ing and the work that mat­ters most.

In par­tic­u­lar, Black­Line helps com­pa­nies man­age the finan­cial close by automat­ing account­ing process­es, such as rec­on­cil­i­a­tions or jour­nal entries, reduc­ing detail-heavy, rou­tine tasks that dis­tract from high­er-val­ue work. It recent­ly intro­duced a new solu­tion to speed up accounts receiv­able cash appli­ca­tion by using arti­fi­cial intel­li­gence to auto­mat­i­cal­ly match cus­tomer pay­ments to invoic­es and pro­vide real-time vis­i­bil­i­ty over cash flow.

“By reduc­ing errors and inac­cu­ra­cies in the finance func­tion, our automa­tion ulti­mate­ly frees up time for more com­plex and valu­able tasks, includ­ing analy­sis and fore­cast­ing,” says Huff­man. “An end-to-end auto­mat­ed account­ing envi­ron­ment also leads to bet­ter con­trol, ensur­ing key process­es are secure, stan­dard­ised and repeat­able, and is much bet­ter suit­ed to work­ing vir­tu­al­ly. It pro­tects files and doc­u­men­ta­tion by stor­ing them cen­tral­ly and elim­i­nates the need to share data via email or oth­er unse­cured process­es.

“Most impor­tant­ly, embed­ding automa­tion with­in day-to-day activ­i­ties facil­i­tates real-time finan­cial intel­li­gence, enabling CFOs and their teams to ele­vate their role by pro­vid­ing unprece­dent­ed val­ue and con­sul­tan­cy to the broad­er busi­ness. Rather than sole­ly man­ag­ing data, dig­i­tal trans­for­ma­tion enables finance depart­ments to acti­vate it and uncov­er valu­able insights that could ulti­mate­ly deter­mine the suc­cess of their busi­ness, trans­form­ing finance and account­ing into a high­ly val­ued strate­gic busi­ness part­ner. The organ­i­sa­tions that use finan­cial data to their advan­tage will ulti­mate­ly be bet­ter posi­tioned as we move from cri­sis mode and into post-pan­dem­ic recov­ery.”

For more infor­ma­tion please vis­it www.blackline.com/covid‑F&A‑survey

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