CFOs and senior accounting professionals already manage the information that is essential to profitability: general ledger, accounts receivable, accounts payable, purchasing, budgeting, costing and so on.
In light of the finance professional’s responsibilities, it makes sense that CEOs and boards want the CFO to lead digital initiatives in order to create more efficiencies, insights and value over the long term.
Why CFOs Turn to Cloud ERP to Streamline Financial Processes
Digitalization is the conversion of analog (paper-based processes) into business processes that leverage cloud technology innovation. The January 2020 survey, “Streamlining Financial Processes in the Cloud,” found that almost 60% of finance professional survey respondents identified manual processes as their top pain point, and view cloud as the most relevant infrastructure for managing and automating financial processes.
CFOs Adopt Cloud Technology to Support Digital Change Starting with their own Department
Survey respondents are focused on cloud in an attempt to help finance departments improve access, collaboration, and shared workflows with other departments while maintaining control and improving the efficiency of approval processes with more accurate data. Native cloud applications, those that were architected for the cloud using modern computing technology, also hold the potential for faster reporting capabilities and shorter planning cycles with access to real-time accurate data.
Citing the same survey, almost 50% of all respondents indicated that their finance technology investments were driven by a need to improve processing efficiencies for finance and accounting functions. About one third said their finance technology investments were driven by calls for greater visibility around budget management, cash flow projections, and reporting. Other digital initiative priorities include the ability to:
- Align finance technology strategies to improve efficiencies and visibility
- Standardize and streamline financial workflows through a centralized solution
- Increase employee value-added tasks by reducing manual finance processing
- Automate all key accounting processes, such as journal entries, accounts receivable, and accounts payable
- Control and accurately manage cash flow, track fixed assets, control budgets, and monitor project costs
- Process reconciliations, bank statements, and payments by various methods including checks, cash, and bank transfer
- Create standard or customized reports from real-time data for business planning and audit reviews
The finance function as we know it will be transformed by CFO innovation as talent is reskilled and deployed throughout the business in a new strategic capacity.
With disruptive business changes across organizations more commonplace, finance leaders are adopting technologies to manage quickly evolving business needs, such as creating new revenue streams, improving business agility and responding to competitive threats.
Financial Controller Maxim Fisun joined Xiris, an industrial equipment manufacturer for vision systems, in 2017, and was tasked with the search for an ERP system.
The decision to find an ERP system was based on our need to get all the information in one place.
– Maxim Fisun, Financial Controller
Siloed information was the biggest challenge facing Xiris. The business had data in disconnected software programs and manually updated spreadsheets. A major consequence of the siloed data was a lack of planning, both in material purchases and production scheduling, resulting in missed deadlines.
With OptiProERP and its fully integrated solution, Mr. Fisun is now getting a complete picture of what is happening in the business – both from a “what happened” perspective, but more importantly from a “what is happening right now” perspective.
The organization is now getting real-time executional data from the business to monitor events as they happen. Managers and employees can take corrective actions that can have a positive effect on the outcome of ongoing jobs and improve results ─ even on the fly.
Everyone was running around trying to do their best. But with all this paper lying around the office, manual processes were a time-consuming activity. The biggest impact on the business was inefficiency.
– Maxim Fisun, Financial Controller
Currently, Xiris is expanding its business globally. They have an office in Germany, with sales agents in India and China, and are adding representation in Malaysia.
Improving Organizational Performance with the Digitalization of Data
CFOs are already leveraging cloud ERP capabilities to automate the optimization of accounting and finance processes. A McKinsey report expects that data visualization is likely to be the next digital initiative to improve broader organizational performance. Again, cloud ERP is the driver, enabling access to real-time data from a single source with the information presented in a standardized, easy-to-consume format.
The digitalization of data helps manufacturers and distributors make informed decisions, drive business growth, and deliver strategic, long-term value information with immediate benefits such as:
- A single view of real-time data, collaboration and communication regardless of location
- Automated mirror processes; the purchase of inventory is reflected in accounts payable
- Accurate job costing based on the actual cost of similar, previous jobs
As we lean into the future, digitalization of manual processes enabled by cloud ERP is becoming the industry standard for manufacturing and distribution companies – regardless of size. In other words, digitalization is here right now. And CFOs are leading the way.
Get started with our guide, How to Lead Digital Initiatives at Your Manufacturing or Distribution Business.