The COVID-19 pandemic has put efficiency and ROI at the forefront of many business leaders’ minds. As a result, many businesses have turned to technology to automate and streamline operations across the business — with a heavy focus on finance.
The focus on driving efficiencies in Finance has increased as the pandemic pushed everything online. Because businesses had to shift online early in the pandemic, they had to embrace new sales channels and adapt internal operations for life at home.
This expansion of digital channels has increased the burden on IT systems, but also on financial systems and operations. Increased burden and need for added scalability has led to a boom in digital transformation efforts across finance — and it couldn’t have happened at a more critical time.
A 2020 survey found that nearly half of finance professionals believe that finance automation technologies have been critical during the pandemic, and this trend is likely to continue. From global expansion to changing regulatory requirements to the acceleration of ecommerce and omnichannel, we’re seeing a confluence of trends that are only increasing the need for technology adoption across finance. Subsequently, finance leaders are having to put together digital transformation strategies and do so fast.
As CFOs and other finance leaders evaluate their digital transformation strategies, there are several considerations that should be kept in mind.
Automate low-priority, time-consuming functions
Along with other pressures created by the pandemic, finance leaders have seen their roles and responsibilities expand beyond the traditional confines of finance. With increased demand to provide data to support decision making across the business, finance teams have needed to find ways to drive efficiencies across their function to keep pace.
To increase efficiency, finance leaders can turn to automation to free up resources on time-consuming functions that are required but provide little value to the bottom line.
Tax is a prime example of functions that can be automated to drive efficiency.
If your company is managing tax compliance in-house, it’s likely that you have one person or several people spending an ample amount of time per month preparing, generating and remitting tax. Many businesses have even resorted to outsourcing to a third-party provider at a high cost or taking a hybrid approach of internal and external to managing tax compliance.
To see if your company could benefit from automating tax compliance, you can ask questions, including:
- How many hours per month are spent on tax calculation and reporting?
- How many employees are involved in the tax reporting lifecycle?
- How much money is being spent on third party vendors to do this work?
Even with all the time, money and effort that is going toward managing tax compliance in-house, it’s difficult to be completely confident that you are in compliance as your business expands into more jurisdictions, across more channels, and as tax regulations continuously change.
Invest in talent to manage and make the most of finance technology
While digital transformation is essential for finance teams in our digital-first world, it’s also critical that finance leaders invest in people to ensure technology-first processes are executed correctly.
Creating and investing in a people strategy is important in not only attracting and retaining top talent, but also in ensuring that digital transformation strategies are carried out successfully.
As technology is implemented to streamline lower priority functions, employee resources can also be allocated to address expanding requests of finance to support other business units.
Leverage cloud-based solutions across operations
When it comes to digital transformation within finance, not all technology is equal. Modern finance teams require technologies that satisfy the requirements of today, while also creating a foundation for growth. Cloud-based finance solutions provide the flexibility and scalability needed to adapt processes as a company grows into new verticals or product sets.
Cloud-based solutions are also essential for finance because of increased data visibility. Seamless integrations between cloud-based systems enables teams to better understand financial data, while analytics capabilities can improve decision-making in real-time. Leveraging outdated on-premises systems can actually pull a digital transformation in the wrong direction by placing unnecessary time and cost restraints on IT and finance resources as they work to keep systems up-to-date.
Shifts in global commerce behaviors and ongoing impacts from the pandemic have placed increased pressure on finance leaders to provide critical decision-making insights while also finding ways to increase efficiency.
Moving forward, finance leaders will have to continually evolve their digital transformation strategies as they begin to uncover additional functions that can benefit from automation to increase efficiency and allow critical resources to focus on what matters most — the bottom line.