Automation of Financial Data Makes Numbers Meaningful

Automation of Financial Data Makes Numbers Meaningful

October 18, 2019

BlackLine Senior Vice President, JAPAC Terry Smagh shares the four fundamentals of automation that Finance Departments need to address to make an impact on Singaporean organizations as a whole.

By Terry Smagh

A key role of the finance function is ensuring that the financial data that executives make decisions from, and that are reported to the public, are accurate. However, our research into the potential scale of financial data inaccuracies uncovered that nearly 70 percent of finance professionals surveyed believed their organisations made a significant business decision based on inaccurate financial data, and over half were not confident they could identify errors before reporting results.

Digital transformation has the power to change the way that finance departments operate by improving the efficiency of processes and the accuracy of data.

CFOs agree that accounting automation is essential to avoid these high margins of error, particularly now that the business world is generating more data and greater business complexity than ever before. Yet, we found that only 41 percent of C-suite executives and financial professionals worldwide have implemented technology in their organisations to mitigate the risk of inaccuracy.

There has also been significant discussion of the shifting talent needs of finance organisations in the Asia-Pacific region with the adoption of new technologies.

Before finance executives can feel confident about the accuracy of their organisation’s financial data, they need to modernise their own processes. CEOs and boards are looking to finance departments to lead the way for organisations by providing, ‘real-time, data-enabled decision support’ according to McKinsey. This is an ideal relationship to aim for in the current operating environment of profit, loss, and global competition.

The question CFOs and finance leaders need to answer is how to make meaningful progress in finance transformation so that accounting and finance can look outward to help the rest of the organisation.

The question is no longer if, but how, to automate. Accounting professionals wrestle with this every day, and the daily influx of new solutions populating the automation landscape isn’t helping. Learning what functions to look for can be daunting, but the fundamentals of best-practice automation are straightforward.

Applying these four fundamentals is a positive step forward, and more CFOs are taking that step every day:

End-To-End Process Automation

Account reconciliation is generally the first process companies choose to automate with modern finance software platforms in order to provide accountants with a streamlined method to verify the correctness and appropriateness of their balance sheets.

Finance departments look to automate task management, variance analysis, transaction matching, and automated journal entry.

Unifying these and other processes on the same platform allows finance departments to gain consistent, end-to-end views of data for root cause analysis and other investigative techniques.

Robust Reporting & Analytics Tools

To maximise process efficiency, reporting tools should be integrated with processes and capable of handling the massive amounts of data that express the details of days, weeks, and years of activity.

Million-row reports are possible today, so there’s more danger than ever in shipping data to a separate reporting application, and back again to analyse the results. At its best, finance reporting fosters creativity by constructing a plane of visibility across accounting processes, letting analysts drill down to real-time answers to questions previous generations may not have even known to ask.

Ability to Scale Across the Organisation

Even without digital transformation, organisations can grow and change very quickly. New products, divisions, and acquisitions can create new data sources that require financial overview.

It’s imperative that the accounting team is able to extend to new enterprise resource planning (ERP) software and other financial systems or adapt to new acquisitions as smoothly and quickly as possible.

Bringing Insight to the Data-Driven Enterprise

Just as business is becoming more data-driven, CFOs are realising that the finance department is in a unique position to help facilitate their organisations’ digital transformation efforts. This includes bringing process automation knowledge—as well as vital data—to groups outside of finance.

CFOs are increasingly bringing data-driven risk management awareness to strategic planning at the CEO and board levels to inform decisions ranging from entering new markets to planning new facilities. Additionally, CFOs are currently partnering with IT to evaluate the costs of new technologies against performance and risk metrics to improve business operations.

This is critically important because of the new technology investments demanded by digital transformation. The greatest opportunities for future finance partnerships may lie in marketing-related initiatives with enterprise business units.

This is just a fragment of the bigger picture. As finance departments in Singapore embark on the digital transformation journey, it is important to start by making the end-game clear. Step back and examine the current processes, redesign them with automation in mind, and lock down the best practices that will lead to optimal efficiency in the long run.

It’s okay to start with one process and add others until you realise success. Technology is equipping CFOs with the tools they need to reshape the finance function, or risk being left behind. As analytics become more advanced, accounting, finance and the CFO will be able to find a variety of new ways to help other enterprise business functions.


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