Stuck in the middle: Why 2024 is the year to get serious about finance transformation
Persistent pain points aren’t going away and there are big benefits for Australian mid-sized businesses that invest in addressing them.
Did your finance department struggle to meet the demands on its time and resources in 2023? It’s a growing challenge in midsized companies. Unlike their counterparts in smaller organisations, midsize finance and accounting teams can’t operate on the proverbial shoestring and they don’t have access to the resources larger players enjoy either.
Maintaining regulatory compliance and supporting growth, with limited resources, is a big ask for CFOs of midsize organisations and their teams, and it’s getting bigger by the year, as finance and accounting departments continue to evolve into operational data hubs. Custodians of business data that spans operations to ESG are expected to leverage that data to identify risks and challenges and create detailed, accurate forecasts.
With leaders now embracing the benefits of adopting a data-driven approach to decision making, they’re looking to their in-house finance teams to make an ongoing contribution to growth strategies.
Same staff, more work
But are they giving their CFOs the budget boost they need to up their finance and accounting headcounts accordingly? In most cases, the answer is no. With leadership teams keen to contain outgoings, hiring freezes are the order of the day, most commonly.
Doing more with less can be difficult, particularly if a large volume of the finance team’s time must necessarily be devoted to low-value, data-entry-heavy work.
And, in a great many midsize organisations, this is still the way things roll. Old-school programs and processes persist and there’s often a heavy reliance on spreadsheets to record and manage data.
Financial reporting tends to be marred by high error rates, the adverse consequences of which are two-fold: urgent triage is needed to investigate the anomalies and substantiate the balance sheet; and providing leaders with the timely, accurate information they need to make business-critical decisions is impossible.
The automation advantage
However, solving this conundrum is simple when technology is brought into the equation. Cloud-based continuous accounting software can provide a way forward for midsize organisations that want to minimise manual toil in the finance department and ensure executives have access to the data they need to make informed business decisions.
The term ‘continuous accounting’ refers to a methodology for managing the accounting process by distributing workloads evenly across the accounting cycle, rather than finance teams completing the bulk of it at month- or period-end. It centres around three principles: the automation of repetitive processes; the elimination of bottlenecks at the end of the period; and the creation of a culture of continuous improvement.
Continuous accounting platforms allow businesses to process transactions and update their accounts in real-time. That means they’re able to obtain a detailed, accurate picture of how the organisation is travelling financially – in the here and now, not months earlier when the accounts were last closed off.
Being able to extract up-to-date insights from those up-to-date accounts enables leaders to make better decisions about the management and future direction of the organisation.
Better work, happier team
Embracing automation can also be an effective way for midsize organisations to safeguard one of their greatest assets: their people.
Spending a large proportion of their time completing repetitive tasks is a serious disincentive for up-and-coming finance professionals to stick around long-term – to the point that many midsize organisations operating on legacy finance technology are finding it tough to recruit and retain top-notch talent.
The problem is exacerbated by a national skills shortage which CPA Australia chief executive Andrew Hunter has publicly described as critical, for businesses and the economy.
Being mired in the mundane means finance and accounting professionals don’t get the professional challenges and career satisfaction that make coming to work worthwhile, nor the opportunity to feel like they’re making a material contribution to the success of the business.
Relieve them of the bulk of their low-value, transactional tasks and it’s a very different story.
Strong foundations for future success
The upcoming year promises to be a challenging one for Australian businesses of all stripes and sizes, as economic pressures continue to impact operating costs and customer demand. Midsize concerns may struggle if they’re not fully across their finances and in a position to respond rapidly to changing conditions. Adopting automated accounting solutions enables finance teams to deliver the expert insights leaders need to move forward with confidence, and at speed. If maintaining profitability and growth are priorities for your organisation in 2024 and beyond, it’s an investment that will pay for itself many times over.
Rosie Cairnes, Regional Vice President, BlackLine
