Top trends to impact the finance function

The evolving finance function

The role of the finance function is changing rapidly. Traditionally finance’s role was to look back, reporting on past performance. But today, the business relies on financial data to plan for the future. With new demands for data insight, finance departments are now expected to evolve, harnessing technology to boost productivity, save time and drive ROI. With a changing remit, the function has to find hybrid strategies for balancing old and new responsibilities. This article discusses five trends that finance leaders need to know about to help them keep pace and upskill in a rapidly evolving environment.

1 The CFO’s role is expanding

In days gone by, finance professionals might have been viewed as primarily spreadsheet experts. However, the CFO’s role is evolving and becoming more elevated. According McKinsey’s latest global survey, 41%¹ of a CFO’s time in the last year was spent not on traditional finance, but on other roles including strategic leadership, performance management, big data and analytics. With CFOs more closely involved with boardroom level strategy than ever before, they must keep pace with change; this means reviewing the activities which traditionally fell under their remit and expanding it. Finance leads should be asking how they can move away from administrative and transactional tasks and towards digitally enabled strategy.

2 Data analysis will drive smarter investments

Businesses now understand the power of data insight and are increasingly putting it at the core of business-critical decision making. Nowhere is this more evident than in the finance department where investment and capital allocation is facing digital and analytical overhaul. Here lies the data insight which will ultimately decide the future direction of the company. As a result, today’s CFO and their team must become the authority in analysing and valuing information to detect future risks and opportunities to the business. However, finance leaders are becoming ever more time poor as their traditional role evolves and they try to bridge the digital/analogue gap. Currently, more than 60%² say they are not spending enough time providing analytic insights.

3 Online collaboration relieves pressure

However, pressure doesn’t just come from board-level. With every other department also expected to make decisions based on ROI, finance must contend with an increase in demands from other functions for their relevant data. To avoid getting overwhelmed with these requests, a balance must be struck when democratising data insight to ensure that every other departments can independently find the information they need without central functions acting as a bottleneck. 

As a result, finance departments are increasingly moving away from manual processes and disconnected spreadsheets towards an integrated enterprise financial software platform. This relieves the pressure on finance teams to always be the source of information. Visual analytics and dashboards make it easier for even the most technophobic user to quickly view, interact with, and digest vital information.

4 Automation will become a necessity

While demands on the finance team are increasing, many professionals continue to be hindered by traditional, transactional obligations such as invoice processing. Automation offers a promising solution: 40%³ of finance activities including cash disbursement, revenue management, general accounting and operations can be fully automated, whilst another 17% can be mostly automated. To become the data-insight hub that organisations are beginning to expect, whilst ensuring that suppliers and employees still get paid, finance must find a way of taking the manual out of key processes. Solutions based on Robotic Process Automation (RPA) offer a flexible starting point for this journey, as they offer the benefit of integrating with current programmes whilst requiring a fraction of the time and cost investment of a major platform update. This means that organisations can experience the benefits of automation, whilst minimising the impact to daily workflows.

5 Artificial intelligence moves to new realms

While automation saves time on routine tasks, Artificial Intelligence (AI) provides a way to enhance the finance function on a smarter level. From a day-to-day perspective, AI-driven chatbots can be taught to provide intelligent responses to common questions from employees or customers. Meanwhile, AI systems can also be trained to help enforce business compliance, for example by spotting instances where employees are not complying with internal company policy, or with current external regulations. Looking to the future we can expect businesses to start using AI in a more advanced way, using it to monitor for new regulation which may impact the business, and proactively advise finance professionals accordingly.

The role of the finance function is changing, with CFOs playing an increasingly crucial role in deciding the future strategy of the company. Whilst this represents a new opportunity for the finance department, the fact of the matter is that new responsibilities such as data insight are extra work for the busy finance professional. It is therefore up to finance leaders to make the case to the business that their team needs to free up time spent handling traditional tasks. Whilst suppliers will always need paying, harnessing technology such as automation and AI can reduce the manual workload of these workflows, allowing the team to spend their time on more valuable, future-looking work.