The role of the CFO has evolved considerably from the days when the finance function existed simply to manage the company’s finances. Now, the finance team is, or should be, a centre of innovation for any organisation. When finance professionals are un-tethered from mundane, repetitive finance operations, they can contribute significantly to an organisation’s growth.
To do so effectively, they must leverage key technologies, according to Concur.
Matthew Goss, managing director, ANZ, SAP Concur, said, “CFOs are often de facto deputy CEOs. Their role in the organisation is crucial and it includes operational responsibilities as well as strategic and innovation imperatives. They don’t have time for manual processes and they need to understand every aspect of the business so they can be alert for opportunities to drive efficiencies. It’s a huge undertaking and the only way the modern CFO can excel in the role is to leverage the right technologies.”
There are four key technologies that are expected to drive the evolution of the CFO:
Best-known as the technology that underpins cryptocurrencies such as Bitcoin, blockchain is a distributed ledger system that creates verified chains of transactions that can’t be secretly altered or deleted. The financial services industry is already exploring blockchain uses and, according to EY, global systems that could revolutionise finance operations will be implemented in the coming year. (1)
Blockchains can help improve IT security, manage extended value chains, and streamline contract enforcement. It can simplify audit procedures and facilitate faster business transactions. It’s therefore essential for CFOs to educate themselves about blockchain and how it can be used in their organisation.
2. Unified ledger integration
Unified ledgers have always been the goal for finance professionals. They can reduce human error and improve efficiency. Using blockchain, unified ledgers can be operated in real time and simultaneously. As soon as one person records a transaction, it will be updated immediately in all copies of the ledger, regardless of whether someone else is also working on the ledger at the same time.
Unified ledgers can therefore produce information that is high quality and timely. This will deliver the kind of real-time business analytics that can completely change the game for organisations that can turn those insights into action.
3. Artificial intelligence
There is no doubt that AI will continue to gain popularity in 2018. A recent survey of 235 businesses found that 38 per cent of companies are already using AI and 62 per cent will use AI technologies in 2018. (2)
AI and machine learning will dramatically increase the amount of automation in the finance function. This will make it easier to identify patterns, spot anomalies, detect fraud, and manage transactions more efficiently. The more advanced AI becomes, the less time finance professionals will need to spend on routine tasks. This frees them up to deal with exceptions and create proactive, strategic plans to drive the business forward.
4. Digital invoicing
Managing a pile of paper invoices each month costs businesses significantly in terms of the time it takes, the potential for error, and the likelihood of missing out on early-payment discounts or even having to pay late-payment penalties. There are systems that can turn those paper-based invoices into digital versions, which can then be inserted into workflows and managed. However, digital invoicing will make this process even simpler. Instead of receiving a paper invoice, all invoices will be sent electronically so they can be managed according to a set of defined rules. Automation software can automatically pay invoices that match with purchase orders, while referring exceptions to the relevant employee to sort out.
The Australian Taxation Office found that a unified electronic invoice approach in Australia could save the economy as much as $10 billion per year.
Matthew Goss said, “These four technologies can work together to revolutionise the way finances are managed, letting the CFO and the finance team focus almost entirely on innovation and strategy. This will let businesses compete more effectively and move faster to seize key opportunities. Today’s CFOs need to examine these technologies and consider how they could be implemented, or else they may risk falling behind and becoming irrelevant.”
The PASA CPO Summit, Future Proofing You’, will be held on 13 & 14th March 2018 in Sydney.
(1) – http://www.ey.com/gl/en/industries/technology/ey-how-blockchain-technology-could-impact-the-cfo
(2) – https://narrativescience.com/Offers/Outlook-on-AI-Research-Report