7 August 2020
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The finance department is not what it used to be. What’s expected from the finance team has changed drastically over the last decade with the move to data-driven business. Expectations extend far beyond basic financial controls. CFOs responsibilities now tie in directly with an organisation’s major business goals.
To effectively achieve key objectives such as improving productivity, managing risk and growing profitability, requires a significant change in financial reporting. A shift from predominantly historical reporting to a forward-looking viewpoint that keeps pace with business needs.
And leading these changes may uncover a few challenges for the CFO. Let’s explore some common issues this transition presents and where potential solutions lie.
The pressure is on for the modern CFO. Not only are there demands for financial analysis to be more efficient, but also more accessible as well as transparent. This may seem like a tall order, especially if your business systems don’t support streamlined data analytics.
Efficiency is the name of the game when it comes to agile decision-making and maintaining a competitive advantage. And finance is no exception.
Finance processes need to be as near to real-time as possible to flow vital information to the c-suite. And though delays do occur as data flows through an organisation, the slower the flow, the less useful the data is.
Only when the data is moving at a good pace does it become viable to share these insights with other parties.
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Not only c-suites require access to critical financial insights, but also the board and audit committees. And more and more, the broader workforce.
However, providing more users with access to financial data can be a two-edged sword. Though greater accessibility is good, it can add further complexities if not managed well. Not all those accessing financial data have the skills and knowledge to understand and use it correctly. In this case, the finance department may spend more time explaining their reports rather than leading the company with financial insights.
One way to remedy this is to use a simple and intuitive finance analytics platform. This way, more users can grasp and engage with the data. And the more eyes on the data, the quicker potential errors are uncovered and resolved.
Transparency is a given with the finance team managing the lifeblood of the organisation.
But delays in collecting finance data can often hinder transparency. It involves many steps and different roles, which slow the process down. And the greater this delay, the lower the level of transparency.
Or if the need for transparency bogs down the CFO, this can also be problematic. A typical example is the finance team accounting for its own spend. Say the team requires a modern financial analytics solution. The rest of the C-suite will demand ROI figures to justify this outlay. Now the CFO has to shift their focus to reporting on this internal expense, rather than investigating means to increase business profits.
If the team could leverage a fast financial reporting solution, it would speed up the time to insights and free up the CFO for higher-level tasks.
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Regulatory and compliance requirements in the finance industry change frequently. New regulations on an international and local level, such as those issued by the Financial Accounting Standards Board or International Financial Reporting Standards, seem to keep popping up. And it’s hard to stay up-to-date and implement the changes throughout your finance system.
And it gets more complicated when your business spans different countries or even continents. Now you have rules and regulations that are specific to geographies too.
As a result, many CFOs put off these seemingly cumbersome changes till the last minute. But it’s best to implement them as soon as possible to avoid penalties and to maintain a good relationship with your auditors!
To streamline these processes and save time, make sure your reporting solution provides a complete view of compliance and risk issues, so it’s easier to manage.
Financial data is pulled from many disparate sources – your business units, an endless array of systems and from a plethora of software solutions.
To bring it all together into a coherent data set takes time and resources. And if your organisation is operating with legacy systems, this process could be even more drawn out. The finance team may need to jump from one system to another to gather and organise findings. And the less streamlined this data journey, the greater the risk of errors creeping in.
If you happen to moonlight as an air traffic controller, then you’ve got this! But for lesser mortals, you will need a modern analytics solution that brings everything together.
Best-in-class platforms should enable you to view a ‘flash’ balance sheet and explore fully integrated financial data. Plus manage expenses in real-time, rather than taking action after reviewing month-end reports. With everything in one system, you can spend less time piecing together reports and instead focus on analysing data that forwards business goals.
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Bad data is a problem that can get out of hand very quickly. It may begin with a small, seemingly insignificant error. But the effect multiplies exponentially as the error pulls through into numerous business systems and reports. In finance, it is especially dangerous as it can lead to all your collation, synthesis and analysis efforts being in vain.
Unfortunately, as more and more people work with finance data, the risk of bad data creeping in can increase, if the process is not managed properly.
This is where good data management is essential. Data management is something that involves the whole team and is not a once-off task. It requires a continual, collective effort. Because if the data is not good, it cannot be trusted. And since data is the source of all your financial reporting, it’s essential to get it right.
Ideally, users should have a safe environment to explore finance data without the risk of input errors.
Working with business systems that don’t integrate with your finance platform is a common headache. This could include payroll software or expense management platforms that don’t integrate well with banking platforms or CRM software that does not mesh with your existing financial reporting system.
The result is a lot of valuable time wasted and the risk of missing out on revenue opportunities.
To transform your financial reporting in Qlik Sense, you need intuitive solutions that bring everything together and speed up the reporting process.
Finance is more than a mere business function. It is weaved through the fabric of the whole enterprise and is an essential driver of transformation.
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The best finance analytics solution should provide a 360-degree view of your organisation’s financial health.
Vizlib Finance sets up your team for easy data exploration without relying on IT or data scientists. You can share insights easily with streamlined collaboration options. And the out-of-the-box finance templates empower anyone on your team to quickly create powerful financial reports in Qlik Sense.
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Using data effectively is the cornerstone of modern finance. With the right analytics solution, you and your team can speed up the reporting process, uncover insights and positively impact your organisation’s bottom line.
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