With the aid of digital technology, today’s business accounting and finance teams have become increasingly efficient, streamlined, and goal oriented. Financial operations transformation is the process of maximizing the effectiveness of the finance and accounting functions by leveraging contemporary innovations in accounting to support the business’s long-term objectives.
Financial operations transformation takes place on two planes: strategic and tactical.
Businesses pursuing a transformation of their financial operations are embracing a long-term strategic shift which affects process culture and goals. The objective is to make the business more efficient, streamlined, less reliant on manual tasks, and more transparent.
The transformation incorporates a more holistic approach to finance and accounting that supports long-term objectives and other business functions.
Financial operations transformation also incorporates tactical or practical improvements. Most of these involve technology and the psychological shift that it accompanies. Changes such as accounting automation, continuous accounting, and the virtual close can be key drivers of financial operations transformation.
At the strategic level, transformation of financial operations is achieved through a cultural shift in the business environment. A forward-thinking business will adopt strategies that achieve faster, more responsive, less manual, and more transparent processes. This involves training and a commitment to (digital) change.
These strategies support the integration of technology into the accounting and finance functions. This creates not only a faster operation, but one that is more easily and effectively integrated into other related operations of the business.
Staff spends less time on tedious and time-consuming, manual tasks, such as data entry and reconciliation. Accuracy is enhanced. Staff can spend more time on high level tasks that support deep analysis and quick decision-making.
The enhanced functions of computer software allow the business to produce timely reports with less manual effort, to spend more time reviewing and analyzing their financial statements, and making high level business decisions based on the information contained in those statements.
At the tactical level, financial process transformation incorporates digital technology and leverages the benefits to be gained from it, to improve the operations of the business.
Enterprise resource planning (ERP) is the digitization of the business’s operations. This allows for greater integration of different operations, faster processes, and improved insight or intelligence about the business’s performance.
Having an ERP platform supports the development of a master standard of data entry protocols, which allows the business to gather information from various sources and input the data in a consistent format. This supports the building of a centralized database to improve efficiency, reduce errors, and minimize time spent on manual entry and extraction of data.
Within the ERP platform, businesses typically have also embraced modern accounting or accounting automation. Also known as computerized accounting, this evolution of the business accounting process adopts and incorporates such advanced technological capabilities as cloud computing, machine learning, and robotic process automation.
This technology can help the business create rules to define automated workflows, which streamline the processes of accounting. A modernized accounting system allows the business to perform various iterations of accounting in a more streamlined and efficient way. Continuous accounting, for example, is the application of digital technology to track and reconcile every aspect of the business’s financial activity in such a way that all manner of accounting takes place on an ongoing, virtual basis.
Real time integration is the application of software solutions in such a way as to dramatically speed up the time it takes to enter and process information. Computer programs that are working together can process and apply information almost instantaneously.
Finally, the virtual close refers to a fully automated and completely integrated digital accounting system that enables a business to produce accurate financial statements at any time.
Financial operations transformation entails a cultural shift in which the business has adopted a modern ethos. It is taking a holistic and integrated approach to all its functions and departments.
Instead of operating in “silos,” functions work together and in synchronization toward the common goals of the business.
Embracing technology helps businesses streamline and improve their accounting process by applying a digital application to many of the functions normally assigned to a person or team of people. Computers can perform manual tasks in a fraction of the time it takes for humans to do the same, so digitizing routine, repetitive, time-consuming, and tedious tasks dramatically speeds up the overall process.
Modern accounting improves the business operation. Real-time execution can increase cash flow by streamlining the cash application and reconciliation processes. It frees up staff to perform other higher-level functions, such as analysis and strategic evaluation. It improves accuracy, and it allows management to make informed decisions more nimbly.
All of the above makes the business more effective, efficient, and ultimately, more competitive.
Solutions
Consolidation & Financial Analytics
Modern Accounting Playbook
Company
© 2024 BlackLine Inc.