Some things are fundamental to a well-run business, and a solid finance operation is one of them. It’s the pump behind the flow of financial information that feeds every activity in your organization.
As Deloitte and many other industry leaders know, finance performance management is an essential component of any well-run organization.
By 2020, industry analyst Gartner expects 60% of the world’s top 1,000 companies to be using cloud financial corporate management capabilities. (Gartner ranked BlackLine a quadrant leader in the category. You can download the report here.)
What may be in question for some companies, however, is how to achieve the goal of maximizing finance performance. Here are four essential components.
Self-awareness, or self-knowledge, comes from end-to-end integration of the data that drives accounting automation systems. This lets the different modules – account reconciliation, journaling, transaction matching, and so on – share information on everything from the numbers themselves to the organizational structures and accounting rules that make up the various workflows.
That way, the variance-analysis modules can share information with account reconciliations, for instance, and task management knows where each function is – and who’s responsible for it – at all times.
This same integration forms the basis for a reporting “layer” that can track user queries across modules, choosing from multiple pathways for optimal performance.
Deep integration also means that the reporting function is built into the modules themselves, so users don’t have to exit an accounting module to fire up a separate reporting tool – a practice that can be time-consuming as well as error-prone.
Reporting excellence also means that reporting output will be accessible via dashboards that can visualize results, thus contributing to what-if creativity on the part of the user, even when he or she isn’t a reporting or IT expert.
Process-awareness and reporting excellence also roll up to the solution’s ability to continuously improve its functions by providing insight, via process KPIs, into areas of improvement. The more detailed and far-reaching the KPIs, the more effective their use.
The solution should also allow the user to create custom KPIs. Adding to these is a means of regularly benchmarking KPI performance against industry peers as a further measure of excellence.
Organizations can extend these capabilities by adopting a philosophy of Continuous Accounting, which evens out the peaks and valleys of the accounting cycle by handling many functions in real time, rather than at the close of the period. This helps organizations further improve the performance of their finance operations.
Executive recognition is a fundamental condition to the long-term success of the finance operation. It makes the value of finance visible as a positive influence on other groups within the organization.
This is made easier when the CFO can demonstrate via dashboard visualization how finance is able to achieve the excellence that drives finance performance. Gaining visibility with business units and C-level executives helps finance management win the confidence of other company leaders.
Finance can then be viewed as – and become – a critical asset in helping the organization maximize its own corporate performance.