Great article in CFO Magazine about the fact that financial professionals of organizations spend nearly 50% of their time on processing transactions — plus the additional time it takes to maintain internal controls and do financial reporting. Not much time is left over to dig into decision support such as providing fast, reliable, concise information about the economic implications of specific tactical moves the company may undertake.
The CFO article goes on to describe the need for management accountants to reduce paperwork and manual labor through automation and using new accounting technologies. The article provides an example in accountants payable area. On average companies receive approximately 60% of their vendor invoices in paper or PDF form. Someone has to manually enter that data into company financial systems. Some use optical character-recognition scanning. But that takes time too, and small and midsize companies may not have the wherewithal to do it on a grand scale. So, paper still clogs the system, requiring financial professionals to be trained and managed, and costing time and money, according to the article.
But while paper is an obvious scapegoat, it isn’t the only thing holding finance teams back and not providing the strategic services/consulting necessary to support management and the board. In some organizations, the c-suite fails to effectively communicate nuances in strategy, and some simply keep finance out of the decision-making loop – much to their own detriment.
Overall, the premise of the article is that companies need to have their finance teams process transactions quickly, cheaply, and without errors and free their finance people from moving stacks of paper and get them focused on understanding cost and demand drivers, resource requirements, and operating constraints and the strategic direction of the company and how to get their financially.
This means finance teams need to do more data analytics, provide consulting services to management on helping the company meet strategic goals and using and understanding new technologies to automate paper/PDF and use machine-readable applications such as XBRL to automate functions especially in the general ledger function.