As CFOs take on a more strategic role in the company, improving efficiency, productivity, and data analytics become increasingly important.
A CFO Research survey of senior finance executives, published at the end of last year, reveals that finance is transitioning from a purely tactical role to becoming a more strategic partner in the enterprise. But in order to do that, current processes need to become more efficient and less costly; data must be gathered and analyzed; and value outside of the traditional finance function must be delivered. Finance executives understand that achieving these goals results in considerable benefits to the company. And for this, many have turned to some level of automation.
The CFO survey asked respondents what are the most important benefits realized by improving financial operations (participants were able to enter up to three responses to this question): The responses were:
- 39% – Improved business process execution
- 37% – Better budgeting and forecasting to help achieve corporate goals
- 33% – Increase in net income and profit margins
- 32% – Better working capital and cash management
- 31% – Lower cost of finance operations
Notice that cost is the fifth benefit listed by respondents while efficiency was first. What these senior finance executives have realized is how manual processes, which are fraught with the potential for lost documentation, mis-keyed information, and a total lack of visibility, can cost an enterprise dearly in more than just dollars.
Automating the entire procure-to-pay process helps create these benefits by eliminating paper and manual intervention. By reducing the time and ensuring accuracy, payments can be made and received with a greater level of confidence. Visibility into each step of the invoice and payment lifecycle allows for better cash management. And data captured from current and historical transactions can be used to produce more accurate budgets and forecasts. Yet the CFO Research survey found that more than three-quarters of survey respondents indicated that their finance operations systems still involved a considerable amount of manual intervention to be effective.
So once all of these benefits occur, how do they help Finance go beyond its traditional back-office functions of AP, AR, and cash management? As one of the survey respondents noted, “Less time chasing payables would enable more focus on the business operations.” Another indicated that by “reducing the volume and complexity of operational work” would enable the company to “reinvest savings in higher-value business support and analysis.”
Automating the P2P processes also creates a continuum that encourages full collaboration between procurement and finance. This cooperation, along with the data captured, enables both functions and, by extension, the CFO, to identify product and service trends, pinpoint supplier issues, and recognize opportunities for more productive negotiations.
See how automating your finance functions can lead to greater opportunities for departmental and enterprise growth.