Geoff Brannon, CFO, Oversight
Many finance and accounting professionals are under immense pressure to ensure their financial processes and transactions are managed efficiently and effectively. This became especially critical during COVID as organizations focused more on reducing waste and cutting unnecessary costs.
Typical organizational spend audits look at small samples of past spend manually while also managing many other financial processes. This is time-consuming yet viewed as mission-critical by the organization’s leaders. Thankfully, with the evolution of automation tools like cloud-based software and artificial intelligence (AI) this should be a thing of the past for finance teams.
Improve Efficiency
It’s hard to be effective without efficiency so we’ll start there. Your team is likely overburdened and working remotely. It’s Q4 and stakeholders expect returns. First, the team should assess where they are spending their time manually. For example, take the budget and forecast process critical for all finance organizations.
While historically Excel was the go-to tool used to manage this process, most large organizations and advanced finance teams have adopted better planning solutions. The beauty is these interface directly with the organization’s ERP system, meaning actual results flow into the planning tool in real-time. Gone are the days of exporting financial information from the ERP system and manually re-entering that into the Excel budget file. Talk about an efficiency gain!
Improve Effectiveness
Gaining visibility is critical to successful spend analysis. Mistakes can be made in any department including the finance team. Factors like heavy workloads, inefficient processes and the introduction of remote working, it’s understandable errors happen. To improve effectiveness in the finance department, explore the vast array of software tools that can dramatically improve processes.
Compared to manual efforts, using software automation tools results in better efficiency and accurate outcomes. Beyond saving money, one of the best outputs of these service tools is time. As finance professionals, time and money are what really matter. Leaders can empower their teams by providing competent data software that works 24/7. Manual processes should be left in the past. Cloud-based platforms ensure risk mitigation by getting ahead and identifying leaks and errors.
Become Strategic in Spend Management Efforts
Finance teams measure the performance and activity of the organization. And spend management is certainly one area that finance teams can help improve. By holding individuals and teams accountable, both in terms of mission-critical and discretionary spend, this empowers leaders in the department. Of course, in a perfect world, every employee of an organization would be a good corporate citizen and trusted to spend the company’s money responsibly. And in that same world, no external parties would attempt to de-fraud a company in order to make off with its cash. But we don’t live in a perfect world.
A 2020 study by the Association of Certified Fraud Examiners showed that the average organization loses up to 5% of its revenue to fraud each year. This staggering statistic is one that should get the attention of every finance professional. Fortunately, there are spend risk software tools that can detect and protect against spend errors, waste and fraud. Adopting this method is perhaps the easiest way that a finance team can help improve a company’s spend management efforts.
Transformation in Action
Executing a spend analysis is your organization’s barometer of truth. It sheds light on the data providing a powerhouse of information and insight. Through adopting software automation solutions, finance organizations will reduce the time spent on manual activities. Think of how you want to advance your team as the quarter closes. Transforming the finance department to be more efficient in this way yields two areas of improvement:
- First, massive efficiencies are gained by letting software do the work that was previously done by a human. This frees up team members to invest their time on more strategic areas of finance. Alternatively, these efficiencies can result in cost savings for the organization.
- Second, software automation delivers more accurate information and results, thereby improving the effectiveness of a given process. Take the example of spend risk systems I gave earlier. Instead of manually auditing a certain percentage of an organization’s spend looking for errors, waste and fraud, the spend risk solution can audit 100% of transactions and will find things that a human would miss. This results in a significant improvement in the effectiveness of the process as compared to manual, human efforts.
To increase efficiency and effectiveness in your department by empowering spend management, consider the benefits of a modern software automation tool. How does your organization perform spend analysis? I’d be happy to share how many of our clients have seen great strides implementing spend analysis software.
