Amidst economic uncertainty and rising costs, organizations are looking for effective ways to ensure their future. And if leaders have learned anything from the challenges of the past few years, it’s that agility is often the key to survival.
One of the most effective strategies for creating agility is through digital transformation. According to IDC, companies around the world are projected to spend $1.8 trillion this year on digital transformation, an increase of 17.6% over 2021. These investments are expected to sustain a pace of growth for the next five years, primarily attributed to the benefits of digital transformation efforts, such as resiliency and cost-cutting efficiencies.
As for for organizations considering tech investments to fortify operations and reap the benefits that digital transformation promises to provide, they must keep in mind that the finance department is always in need of modernization.
The benefits of automating paper-based, error-prone financial processes and digitizing financial data extend far beyond the department alone, providing efficiencies and better visibility to help future-proof the entire organization.
Here’s a closer look at what’s needed for finance teams to reimagine their workflows and how the right technology can provide transformative relief during these troubling times while also helping organizations prepare for whatever lies ahead.
A Reimagined Finance Department
The pandemic kick-started a long-overdue modernization of the finance department, compelling organizations to adopt cloud-based technologies and automation to free up their teams from paper dependencies, as well as better enable them for remote work.
Today, an unrelenting labor shortage and a volatile economy intensify the need for modernization. Under-staffed and often overworked, finance staff are under intense pressure to manage their organization’s cash flow and keep a watchful eye on an unpredictable future. They can’t afford antiquated workflows such as entering invoice data, chasing approvals, and mailing paper checks to slow them down or drain their budget.
Many finance professionals have come to expect automated workflows and may look elsewhere if organizations are digital laggards.
According to Workday’s CFO Indicator Survey, finance leaders are automating manual tasks, adopting machine learning (ML), and creating data-driven strategies to face future challenges. Furthermore, the report shows that nearly 60% of CFOs are investing in the cloud and deploying artificial intelligence (AI) and ML solutions.
Technology reduces friction by automating tasks around processing invoices and making payments, which can save significant time and money while freeing teams for more strategic work when their organizations need them most.
Teams who haven’t already started to automate costly manual processes may be looking at end-to-end invoice solutions that offer e-payments in lieu of costly and fraud-prone paper checks. As organizations fight to hold onto talent and attract new hires, many finance professionals have come to expect automated workflows and may look elsewhere if organizations are digital laggards.
Elevating the Finance Team’s Role
Part of the allure of a modernized finance department is that automation technology not only streamlines mission-critical processes and reduces mundane manual work, but also elevates the role of the department. It does this by providing newfound visibility into data, which is especially valuable to organizations as they fight to manage cash flow and mitigate risks.
Advanced technologies including AI and ML empower finance professionals to better analyze the wealth of data within their department and wean valuable insights from it to make better decisions for the business. For instance, they can detect behavioral patterns of vendor payments and invoices to predict the likelihood of those behaviors continuing. Based on those insights, they can then make necessary fixes, such as offering a vendor a more convenient, faster e-payment option. The fix ultimately protects the organization’s bottom line while nurturing and strengthening a valuable relationship to ensure future business.
Technology also empowers the finance team to make market predictions, forecast future spending increases or decreases, and detect the statistical probability of invoice anomalies and fraudulent checks. This helps the organization manage risks, better budget, and create more accurate financial forecasts.
Future of Digital Transformation
While the future remains unpredictable, it’s clear that change is inevitable, and preparing for evolving circumstances is paramount to both success and survival. Organizations can better prepare for what lies ahead by ensuring their finance teams have the tools and support they need to act as strategic business partners.
Innovation promises to create efficiencies, free the finance team from higher-level work, and empower them to guide important decisions that can protect the business and drive bottom-line results.
Cameron White is senior vice president of finance at AvidXchange.