Best practices to embrace finance transformation

Today, Industry 4.0 is sweeping the entire business world.

Corporations across industries, regardless of the scale of their operations, are embracing the wave of digitalisation that is driving business transformation.

While digitalisation is becoming more visible in the front-end of business operations, this drive to adopt digital technologies is extending far beyond the customer side of things and is systematically shifting focus to back-end activities — from labour-intensive manual and analogue processes to automated and optimised digital workflows.

This means that core business functions like procurement, finance, and project management are also becoming more aligned with the demands of Industry 4.0, and are adopting a framework that facilitates the implementation of digital tools and workflows.

The transformation of the finance function, in particular, is swiftly becoming the fuel for business growth and sustainability in the new normal.

Businesses that stick to their traditional processes or fail to set the right tone at the start of this new era face the risk of falling behind the competition.

If your organisation is looking to invest in finance digitalisation to align itself with Industry 4.0 and embrace finance transformation, here are the best practices you need to follow.

Eliminate reliance on legacy tools for financial planning and reporting

The modern financial management landscape is a marked departure from what organisations were used to a decade ago.

Today, the role of finance professionals has evolved to encompass that of a strategic partner in the decision-making process. This is a result of their comprehensive knowledge of the finances of an organisation, which helps significantly upscale the requirements for effective financial management.

Relying on legacy planning and accounting tools, like spreadsheets and emails, are no longer feasible options to meet today’s requirements. These obsolete tools can hinder the efficiency of your finance function and may not provide the insights you need to make strategic decisions.

Your finance teams need the latest FinTech, and other supporting tools, to optimise financial planning and reporting. These tools will allow your team to enhance your data processing and reporting capabilities and cut down on the time and expense it takes to relay necessary information to decision-makers.

Optimise the annual budgeting process

Spend management is a vital part of ensuring that your processes are in line with your finance transformation goals, especially in the current environment.

Most contemporary organisations are moving towards a project-centric approach to deliverables. Whether it is finance, procurement, or manufacturing, you can expect to see these trends continue into the future.

In this landscape, regular workflows that you may leverage for the annual budgeting process may not be adequate to handle the diverse range of projects you undertake. You need to overhaul your budgeting process.

This comes down to adopting a solid spend management platform that supports identifying and assessing sources of risks on a per-project basis, establishing a cash cap for each project; identifying, assessing, and handling organisational assets and liabilities; tracking and monitoring budget finances, and updating budget calculations based on the insights from previous projects.

In addition to these processes, adopting a rolling forecast method in place of a static forecasting technique may also support your financial transformation. This will give your finance function more flexibility to not only handle dynamic market conditions but prepare in advance for what is to come, increasing efficiency and cutting down on reactionary expenses.

Streamline financial close and reporting

Financial close is a daunting prospect for many professionals in the industry.

Preparing consolidated financial reports on the performance of the past year requires pulling data from disparate sources, dealing with transactions in multiple currencies, adhering to various reporting guidelines based on national and international requirements, and reconciling complex intercompany transactions.

This can be a lengthy and labour-intensive process in the absence of tools that augment the efforts of your teams. To complete your financial transformation, you need to optimise this process to eliminate inefficiencies and reduce time spent on preparing reports.

Today, you can do this with advanced AI-powered tools that automate most of the process; leaving your teams to focus on higher value-added tasks.

Support your financial transformation by embracing best practices

Transforming your finance function is no longer a choice but a requirement you need to meet to survive and thrive in Industry 4.0.

Following best practices will help you ensure that you are stepping into the new reality and are prepared to take on challenges and embrace the opportunities ahead.