Navigating a business through today’s turbulent digital climate requires resilience. CFOs can lead their companies toward more resilient operations by understanding what data to collect, how to leverage that data, and how to make sure their employees embrace new, data-driven workflows.
When CFOs get their hands on the correct data, they have better visibility into opportunities that problems might be masking. Of course, knowing which data to collect is one thing. Finding ways to gather it is another. Fortunately, many companies already have the technology to provide some of this data.
Track and Cache CFO-Supportive Data
CFOs and their finance teams can gain access to some of the tools and resources they need by linking their teams’ systems with others throughout the company to promote real-time data visibility. Once they’ve achieved this task, they can analyze the data to enhance and inform their recommendations.
Some examples of the data that matters most for CFOs include:
Supplier information data: Allows CFOs to mitigate potential worries, such as supplier or vendor fraud, swiftly
Cash flow data: Allows for budget forecasting, early identification of late payments, establishing where and when financial bottlenecks keep occurring, and other operational purposes
Cost analysis data: Removes biases and can serve as a baseline for future decision-making
Some teams utilize a financial planning tool that aggregates data from various systems, such as accounting ERP systems, customer relationship management databases, human resources systems, and customer success systems. This provides holistic visibility into key financial and operational metrics of a company.
However, getting finance teams on board with new technology can be challenging. Here’s how CFOs can encourage employees to embrace new, data-driven workflows.
Showing the Value of Automation
Employees tasked with repetitive to-dos, such as manual data entry, understand their work includes substantial tedium. They might not realize that moving these tedious and repetitive tasks off their plates reduces risks for both them and their companies.
When finance teams automate tasks, they significantly decrease the chance of error, which means mistakes become less likely to affect cash flow. At the same time, the speed of completing these tasks increases. Employees accustomed to performing repetitive financial tasks can use their talents for more value-added activities, when those responsibilities no longer burden them.
It can take a while for workers and managers to understand the value of automation in cash flow management and other operations. However, most people get accustomed rapidly to the upsides of automated processes.
Design and Enact Automated Approvals
A verifiable method to encourage interest in financial technology involves using automation software to streamline common processes, such as the approval process for signoffs on expenses, which is usually fraught with delays.
Automated approval processes require less handholding and management. The request or invoice can be entered and followed by a pre-populated approval chain. The authorizer only needs to indicate approval for the document to move on to the next step.
Will people notice the difference? Perhaps not at first, but once the approval process is in place for a few weeks or months, CFOs can use readily available data to show the positive impact on cash flow. For example, data might indicate a trackable cash flow interruption before the automated approval process at the end of each pay period. But with an approval process in play, the data might reveal that the cash flow interruption disappeared. Arguing with objective data is difficult, especially when the data favors automation.
Consider Paperless, Automatic Payment Systems
The consumer market has become paperless; however, many organizations still issue paper checks sent out through snail mail. This adds to the time it takes to get money from place to place and incurs avoidable postage, supply, and human resources costs.
Automated accounts payable systems allow payees, including suppliers and vendors, to create accounts, add payment details and preferred payment methods, and submit invoices rapidly. These systems can even have the capacity to record and manage vendor contracts and other commitments related to the relationship. All authorized users can see and access what they need.
Systems like these aren’t just practical in an age where people are accustomed to paying for goods and services online. They also help cut down processing errors because fewer hands are involved in the payment process. A reduction in mistakes translates to higher degrees of effectiveness and optimization.
Routinely Revisit the Finance Department’s Tech Stack
Technologies continue to evolve by the day. CFOs should be ready to keep up by staying on top of the latest tech stack options. Of course, it’s unnecessary to keep upgrading your tech stack, as constant flux and retraining can negatively impact the bottom line. Nonetheless, knowing what’s available in terms of strategies and technological advancements puts CFOs in a better place to understand the general trends in financial technology.
What are some ways for CFOs to know about best-in-class financial tech stack opportunities? Reading technology-specific articles by industry leaders can be an excellent first step. Attending virtual conferences on emerging platforms can help as well. Additionally, staying connected to a network of other senior finance executives could provide insights into the latest trends and technologies that other CFOs are using. Any chance to remain educated on what’s happening in the planning, forecasting, accounting, and budgeting world from a technical angle is valuable.
Alex Cedro is senior finance executive at Tipalti.