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10 reasons your finance department needs to change

If you’re running the finances for a complex, growing, ambitious business, you need to have all the right tools at your disposal. Large companies tend to be the result of fast growth, multiple acquisitions and geographical expansion. That means you probably run a number of ERP or accounting systems and some of your finance department’s planning and reporting is still managed in Excel.

That’s unsustainable – particularly for businesses with long-term aspirations. And so CFOs and FP&A leaders need to look across the board at their systems and processes to see how they can do things better, and why it matters to change sooner rather than later.

Finance department troubles

We’ve talked to – and worked with – lots of CFOs who want to deliver faster, more accurate insights to support and direct business growth. And from those conversations, we’ve identified 10 common triggers.

Any one of these triggers can be solved by using augmented intelligence. Consolidating real-time data and understanding its use across specific business functions can support businesses to conduct precise gap analysis, finding additional efficiencies and making informed business decisions. 

If you recognise one of these as being applicable to your business, you should consider how you can improve your data gathering, analysis, reporting and insights. If you recognise more than one, you should contact us today for a no-obligation chat!

Trigger #1 –  Multi-entity or multi-location trade

Trading across borders brings financial complexity. You need to manage pricing, currencies, market conditions and economic variations – and be responsive to changes across all areas.

Trigger #2 – Frequent compliance and audit requirements

All companies require auditing. If you also work in a regulated environment, you’ll need to manage compliance requirements as well. It’s vital that you have access to up-to-date data and insights to allow your reporting to be as accurate as possible.

Trigger #3 – Recent compliance or audit failure

Failing to meet your audit or compliance requirements reflects badly on your business and can result in significant fines and reputational damage. If your business has recently fallen foul of compliance or audit rules, you need to reassess your systems and processes quickly.

Trigger #4 – Long period end processes

This can include monthly profit and loss reviews, balance sheets, cash flow, cost compliance and more. If you are struggling to meet internal or shareholder reporting requirements for each quarter, half year or full year, this is a key trigger for change.

Trigger #5 – Frequent forecasting and planning processes

Forecasting is one of the central cogs in the wheel of a successful business. But it’s only as useful as the data its based on. If you don’t have visibility across all the data in your business, forecasting becomes vague and difficult to base decisions on. If you think you should improve the basis for your quarterly forecasts, rolling forecasts, and budgets with multiple versions, you need to start with the data that informs your business insights.

Trigger #6 – High receivables and predictions

If you have high receivables in relation to cash in hand, you need to be in a better position to predict collections and customer behaviour. Understanding when and how your customers pay, and analysing which customers are poor payers will help you to balance your accounts more successfully, improving cash flow and influencing future product or service planning. 

Trigger #7 – Managing cash and sales rolling forecasting

What’s the point of forecasting if your data is incomplete or it takes so long to put the forecast together that it’s out of date as soon as it’s produced? Many businesses use a 13-week cash forecast process for their medium term and sales rolling forecasting. They are a great way for investors and internal reports to assess the financial position of your business. But if you’re stressed because your current systems don’t support the forecasting you need to do, it’s time to face the fact that you need to improve the way you do things. 

Trigger #8 – Tracking covenants and transactional exceptions

Every business has key covenants and KPIs that are essential to the overall success of the business. What if you could establish and track those covenants using real-time data and with the ability to scenario plan to take market, currency and economic factors into account? Using augmented intelligence could transform the way you do business. 

Trigger #9 – Cost optimisation

If you know you need to optimise your costs in order to get through a tough business period, you’ll need to know exactly where those optimisations will come from. It’s not always as simple as increasing prices and reducing headcount. Better data could help you see where individual product margins could be improved; where your estate could be managed more productively; where late payers are having an impact. Why miss out on those opportunities when you don’t have to?

Trigger #10 – Digital transformation

For complex businesses, digital transformation is both essential and incredibly complicated. If your business is in the process of digital transformation – or is considering getting underway – sorting your financial department systems out first is critical. Having poor finance department systems or processes could hold up your entire transformation.

If your finance department needs to upgrade, you know it already. It’s just a case of knowing what to do and how to do it. That’s where we can help. A simple call to us will allow you to have a completely free, no-obligation chat about the key challenges facing your department and what you can do to improve your processes, and the health and wellbeing of your team. Just contact us today to book a call.

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