For many organisations, COVID-19 has accelerated strategic goals linked to their digitalisation and digital transformation. The increased need for digitalisation was made obvious by the soaring rise of Zoom, Microsoft Teams and Slack as companies worldwide were shuttered to contain the virus and forced to move to remote working for much of their operations.
Interestingly, the acceleration of digitalisation has, particularly in SMEs, been driven by CFOs rather than IT. The pandemic has highlighted their role in strategic decision making, putting it front and centre. But with dwindling budgets and reduced teams, CFOs are looking to software and the digital world to help them excel.
CFOs largely work in the shadows; they are the unsung champions of many an organisation. While some may see their work as aggregating data and reporting, there is much, much more to it. And the pandemic has accelerated their rise to prominence and into a strategic position of more importance than ever before.
The complex tasks of forecasting, budgeting and cashflow management have been made even more challenging by a world in which data (especially sales) is fluctuating more than ever. This has borne the need for more frequent updates and for flexibility in adapting an organisation’s financial strategy. Age-old financial plans based on data collected over the past five years may be rendered obsolete by the demands of a world experiencing a global crisis.
Where reporting used to be a monthly occurrence, it is now a bi-weekly or even weekly requirement. The aim being to follow fluctuations and try to be ahead of the curve wherever possible – whether that curve be going up or down.
More rapid responses are being required, with more data to aggregate and analyse. This sense of urgency has pushed CFOs to look to software solutions in helping them meet these new needs.
New and adapted financial software solutions are being developed or improved to help CFOs with their digital needs. In a 2020 industry report, it appeared that Finance teams still spend up to 65% of their time on manual tasks such as invoice processing, expense processing and reconciliation, and reporting.
By turning to digital solutions, CFOs can:
Advances in technology such as Optical Character Recognition (OCR), Artificial Intelligence (AI) and machine learning have been instrumental in helping CFOs digitalise their work. The automation of compliance features at both the legal and business level with tools such as automated expense management has further helped companies with their digital transformations, helping them reach a near-paperless state.
With the right expense solutions, CFOs can simplify employee payments while retaining real-time visibility on expenses ranging from travel to hospitality, but also supplier invoices such as software or remote working tools.
As a result of the last 10 months, companies with a lot of travel and expenses (T&E) are aiming to maximise their ROI on any travel spend. According to Gartner, T&E is one of the most important costs to be introduced as income returns, however the need to control that cost is still there. Indeed, an IDG survey showed an expected renewed emphasis on operational efficiency and cost controls, as well as on expense management. Every dollar spent on travel should be spent only if necessary and have a maximum contribution to an organisation’s bottom line, for the minimum cost.
Remote work at all levels of the chain of command has also introduced the need for more digital processes, including expenses. From submission to control and auditing, it is important that these tasks can be fulfilled on the go for reasons of both safety and economy, such as with the use of a mobile expense app.
In addition, multinational organisations are favouring global T&E solutions based on the improved accuracy and standardisation of the data these provide. Global solutions also make new strategies and policies both quick and easy to deploy internationally.
Digitalising the expense process, in companies where it isn’t already, is a quick win in terms of process efficiency, cost controls and spend savings which also provides CFO with better tools and visibility.
The economic downturn has highlighted the need for better cost controls. Despite the sharp drop in expense reports posted due work from home orders and the halting of most travel, finance teams and CFOs are under increasing pressure to provide detailed spend analysis, identify cost savings opportunities, and understand both their changing revenues and expenses amid budget cuts and unstable circumstances.
Yet, these teams are still spending too much time on their overall expense management process, meaning too little time is being spent on strategic tasks. Spend analysis, in particular, was their top time-sink in 2020, a change from tracking down receipts and expense reports in 2019 but nonetheless a manual task. Aggregating data for reporting remains high on that list, as are expense report auditing and spend optimisation.
This leaves precious little time for process automation and improvements or strategic planning, which is where CFOs really shine and bring their full value to an organisation.
According to the same 2020 industry report which surveyed 200+ US-based finance professionals, 91% of them plan to invest in at least one technology initiative in 2021. COVID has proven that not only is technology useful, but it is central to continuing to provide quality services in a world gone remote. Companies’ digital transformations have accelerated, and those who have gone the fastest have come out more resilient. “Low and slow” does not necessarily win the race in COVID times where it is often better to go faster and make mistakes along the way.
As a result, 68% of respondents from the industry report have or are planning to digitise manual expense and invoicing processes, 67% have or are planning to improve data tracking and reporting to help strategic decision making and 66% have or are planning to automate routine processes with the help of AI, machine learning and process automation.
With the help of a complete end to end expense management solution, these plans can easily be achieved. Expense management is a highly manual process which is easily automated and, in doing so, provides valuable analytics and insights.
While we cannot know what the future will hold, one thing is certain: organisations will be moving towards more digitalisation, not less. CFOs responsibilities are shifting and growing and there are tools that can and will help them navigate this. Forecasting, cashflow management and reporting can be streamlined, and it doesn’t have to cost a fortune.
Taking a long, hard look at your remaining manual processes to identify those which could easily be made digital will save you both time and money in the long run.
Simple tools such as automated expense management can have a huge impact on your process efficiency and cost controls while also helping deal with uncertainty. Because you can’t manage what you can’t measure, getting a measure on your expenses is a step in the right direction.
Digitalisation won’t be stopped, it’s up to each organisation to get with the times and implement the tools to help them thrive.
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