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Razzak Jallow is the CFO of pre-IPO fintech company FloQast.
The workload of accountants is growing. Their tasks are getting more complex, and issues with data quality and accessibility can inhibit their ability to complete their work with confidence. On top of that, hiring and keeping good talent are becoming increasingly difficult. In fact, a steady number of young professionals opt out of the profession, and according to my company’s research, 65% of those currently working in the accounting industry are unsure if they will remain in their roles. These factors intensify burnout among an existing accounting team, which strains the chief financial officer (CFO)’s department’s operations.
To combat these factors, many CFOs are attempting to modernize outdated processes through financial transformation to create better opportunities for their teams. Financial transformation can be defined as reshaping, rethinking and modernizing financial processes to empower companies to unleash employee potential, establish more efficient systems, create a better company culture and make better business decisions.
Sure, the CFO plays a pivotal role in determining the financial direction and vision of the company; research from my company on financial transformation confirms this, showing CFOs are 2.2 times more likely than accountants to know what financial transformation is. However, according to our research, while 90% of accountants are familiar, less than half say they completely understand it. In this dynamic, there’s an opportunity for accountants and CFOs. Accountants can use their knowledge of clever workarounds, coupled with the CFO’s guidance, to steer real, transformative efforts for their organization.
The Financial Transformation Framework
Financial transformation centers around harnessing financial processes in particular ways that enable accounting and finance teams to positively impact their organization’s success. That impact comes from having the time to turn data into intelligent information—defined as data that can be leveraged to inform insights or strategy—which can then be applied to business decisions. A solid framework for financial transformation is built into four main components: automated processes, centralized data, intelligent information and business applications. By learning, understanding and implementing these four key components, CFOs can unlock the full potential of their accountants to carry out success.
Automated Processes
First, implementing new technology should automate tedious accounting tasks. These automated processes create a more efficient system, allowing employees to turn data into intelligent information and establishing centralized data stores to support such efforts.
Accountants know better than anyone what works and what doesn’t in their day-to-day work. They often devise the best workarounds to process and technology limitations. However, for real transformation to begin, accountants must identify and feel empowered to point out the areas of possible improvement in their workflow through technology and work collaboratively with the CFO on how to achieve this. This collaboration shouldn’t be viewed as just a project but as a crucial step in accountants’ career development toward leadership roles. By actively participating in transformation efforts, accountants can demonstrate strategic thinking, problem-solving skills and the ability to drive organizational change—all key qualities for future leaders. This approach will ultimately benefit them personally through career growth, their department through improved processes and the entire organization through more efficient financial operations and a stronger leadership pipeline.
Both sides must be responsible for filling these knowledge gaps to ensure everyone is on the same page. CFOs could benefit from asking their team (not just direct reports) what the tech needs to do and if a solution’s features are useful. Until CFOs work more collaboratively to understand the experiences that accountants face, there will still be a lack of attention and allocation of resources to the necessary technology.
Centralized Data
Access to centralized data cannot alone influence the organization’s success, but it’s certainly a step in the right direction. If done correctly, implementing automated processes will establish stores of centralized data.
My company’s data found that 25% of CFOs and 17% of accountants agreed that their data was siloed in different departments or systems. While centralized data is essential to financial transformation, it’s crucial to understand that this goes far beyond the general ledger (GL). What’s truly needed is centralized workflow data, which encompasses the entire financial ecosystem. Centralizing this comprehensive workflow data must be combined with effective communication between departments and proper data utilization to drive organizational success. By breaking down data silos, both CFOs and accountants will have access to, and can effectively use, centralized data as part of the broader financial transformation effort. This holistic view enables more informed decision-making and provides insights into process inefficiencies and opportunities for improvement.
Intelligent Information
After data silos are broken down, teams must focus on utilizing overlooked intelligent information. Most automation initiatives focus on immediate solutions for processes and data instead of adopting a transformative strategy with a definite objective.
While the benefits of automated processes, such as time savings and accessible data, are recognized, there appears to be a gap in leveraging intelligent information. One survey found that over a third of organizations lack the internal expertise needed to analyze their financial data properly, even when they have access to it. Organizations must shift their focus to fully realize the potential of automation and intelligent information in their financial transformation efforts.
Business Applications
Finally, understanding business decisions and having the opportunity to share intelligent information with business decision-makers is ultimately what makes a successful organization. Without financial transformation, however, this business impact cannot be achieved.
Teams must focus on leveraging financial transformation to enable the sharing of intelligent information with business decision-makers. This involves ensuring that your financial processes and systems are set up to collect and analyze data and present it in a way that supports and enhances decision-making.
Putting It All Together
While many organizations undertake financial transformation initiatives, they often focus on limited aspects of the process. For total success, CFOs and their accountants should address each component of the financial transformation framework and foster collaboration through open communication. This approach empowers organizations to drive success through improved processes and decision-making capabilities.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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