Q&A: Embedding resilience in F&A

Companies that harness robust and comprehensive data to make rapid, intelligent decisions will be in a stronger position to adapt as the economy wavers, explains Mike Polaha, senior vice-president of finance solutions and technology at BlackLine
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What are the key challenges CFOs face in 2023?

For many businesses, market instability is adding more uncertainty to an already challenging and unpredictable global business environment. Organisations must carefully consider how they can respond and remain competitive, agile and resilient.

In our recent survey, CFOs identified the two biggest challenges facing them this year as increasing scrutiny and providing accurate data quickly enough to respond to market changes. 61% added that real-time visibility of finances would be a must for business survival next year as the external economic environment creates more demand for CFOs to provide visibility over important financial metrics.

But we also know that there is a serious lack of confidence in the numbers that are used to make crucial business decisions.

In 2018, 71% of C-suite respondents completely trusted the accuracy of their financial data compared to just 38% of finance and accounting (F&A) professionals. By contrast, our most recent survey found that C-suite trust was 58%, with F&A confidence at 45%. This suggests that many CFOs could be making decisions or providing recommendations based on out-of-date or inaccurate financial information - something that must be urgently addressed.

How can they balance growth and cost efficiency in the current economic climate?

Companies are torn between pursuing growth and achieving cost efficiency. 55% of CEO respondents are worried their organisation will face higher costs as interest rates continue to rise. A further 45% are concerned customers and prospects will spend less.

At a time when many are looking to drive out costs, investing in the right tools might feel counterintuitive. But 60% of organisations want to implement or scale automation solutions as a way to reduce costs long term, while 59% plan to do the same to improve working capital. There’s real value there.

How can organisations gain better control and visibility of their financial data, processes and working capital?

Technology remains an important part of the solution. Although it can’t remove economic uncertainty, it allows companies to become more efficient, reduce errors in financial data and provide the visibility that allows them to make more informed decisions.

Many organisations have automated areas such as accounts payable to improve efficiency, but the prevalence of manual, repetitive processes in other areas poses serious issues. And unprecedented demands on F&A are also putting unsustainable pressure on people, processes and technology.

Accounting teams are being pushed to close their books faster, optimise working capital and improve operational efficiency while continuing to deliver real-time information to their business partners. Often, they’re dealing with a range of disparate solutions, requiring them to process and analyse disconnected data and turn it into valuable business intelligence.

When combating economic headwinds, real-time access to financial data helps expedite decision-making

What digital transformation strategies should CFOs deploy in response to increasingly complex risks?

When combating economic headwinds, real-time access to financial data helps expedite decision-making and gives F&A professionals more time to focus on valuable work. Another example is applying payments to customer accounts quickly and accurately. This is one of the fastest ways to get cash into your business. Manual processes slow things down considerably and mean that cash is trapped on balance sheets rather than being put to work.

Additionally, automation and the latest cloud-based software provide real-time reporting on status and action items, enabling staff to stay informed of risks, audits, issues and remediation activities or to address specific controls, procedures and assignments.

Manual work is also making existing roles unattractive for good candidates and hindering skills development. It can often be unnecessarily time-consuming, impacting opportunities to learn new skills. But through digital transformation and automation, more time can be freed up for development, enabling F&A talent to focus on the value-add work.

How can financial automation software be used to transform finance and accounting operations?

Financial accounting is a key area for delivering transformation. From month-end close to reconciliation processes and beyond, automation can free up accountants to focus on more valuable activities. Instead of simply crunching the numbers and identifying anomalies, they can truly understand them.

For more information visit blackline.com