The speed at which companies do business has increased dramatically as strategic decisions become informed by real time data. Businesses can access customer and system data instantly, spotting issues, trends and spikes, to make in-the-moment decisions. Adaption to this change has become commonplace in marketing, sales, engineering and customer support; now we’re seeing it shift into finance. However, most finance teams are not nimble enough to gather and react to data as it happens.
In the 2015 Benchmarking The Accounting & Finance Function report produced by Robert Half, CFO’s stated that their biggest challenges were providing timely, relevant feedback to operating managers and helping them understand how the financial results relate to operational performance.
Financial data is the cornerstone of any business, but it’s losing some of it’s strategic power as decisions need to be made faster than the data can be pulled together. Most finance teams are handcuffed to the end of the month, waiting for information to file in from other departments so they can close out their books. However, there are steps to take towards creating a more agile team.
So how can finance improve their agility and gather data faster to be able to make strategic recommendations at the new speed of business?
Overcome Manual Data Entry
This is the hardest part because finance is often reliant on outside departments for data. You wait. You ask. You finally get it, and it’s wrong or a mess. The best way to overcome this challenge is to make sending data to finance easier and more structured. Use tools that you can customize with fields and drop down menus to structure the data being entered. Also be sure to choose a product that is user friendly, you may even want to beta test is with a group outside of finance before committing to buy it. The easier you make it, the better data you’ll get and the less time you’ll spend fixing it each month.
Use Real Time Tools
There aren’t many truly real time tools available for finance yet, but some do exist and more are coming. This is a feature to keep an eye out for when adding a tool to your cloud accounting stack. The more real time insight you have into things like cash flow, the more strategic your decisions can be. When selecting a tool, be sure to understand how the data is pushed into the system, when you can see it and how often it’s updating or syncing to other systems.
Look Forward More and Backwards Less
Yearly budgets and forecasts are usually out of date by the time they are put into place. The reason is because business is not static. Unplanned events can affect the framework that you put into place and finance will need to continually make adjustments in order to provide strategic value. However, in order to create continuous, forward-looking budgets and forecasts, finance has to have systems in place to see and react to change. As you have more real time, better structured data, you’ll be able to adjust budgets and forecasts regularly with less manual work.
Be Proactive About Sharing Insights
Don’t wait for people to seek out the new insights that you have – share it first. This will help increase the buy-in to the process of collecting the data, as well as to any costs incurred from adding on tools. Sharing financial insights proactively will also help transition the way the company uses the data in strategic decisions.