Spreadsheets are fast going the way of the horse and buggy or VHS tapes, says Matt Bagley, CFO of Unit4, a software company based in London that designs and delivers enterprise software and ERP applications and related professional services for people in services organizations.
Bagley spoke with StrategicCFO360 about the key to a successful data transformation, why it’s more necessary than ever and the difference between a “push” and a “pull” approach to financial information.
What are the main challenges organizations face today with financial reporting?
The main challenge organizations face across the board is the realization that managing static spreadsheets is no longer a viable solution for financial reporting. Especially in today’s new world of work with teams being distributed across the globe and remote work continuing to remain in high demand by employees, spreadsheets can no longer keep up with finance teams’ needs when it comes to reporting.
Top talent needed to build high performing finance teams is becoming harder to come by, so there’s a real business case for maximizing efficiency. With a decentralized approach to financial reporting, finance teams spend a disproportionate amount of their time functioning as “spreadsheet jockeys.” Bogged down by manual tasks like data preparation and budget reconciliation, finance teams don’t have the time and resources to focus on bigger picture objectives such as strategic alignment.
According to BPM Partners’ annual survey on the state of financial reporting, organizations are facing similar challenges when it comes to financial reporting, including slower budgeting, unconnected data sources, inability to determine actual profitability and lack of strategic alignment. As a result, it will be crucial for finance teams to reimagine their reporting processes and deploy new, digital strategies to stay afloat.
How can organizations mitigate these challenges and improve their financial reporting process?
The short answer: digital transformation.
Rather than implementing quick, temporary fixes that may work for the foreseeable future, CFOs must consider financial reporting transformation on a large scale with a strategy that can grow and adapt as reporting processes evolve over time. Successful digital transformation starts with finding the system that best fits within your organization.
Modern financial reporting processes require integrated and flexible systems that grow as your organization grows. Financial planning and analysis software is one example of a tool that can help organizations improve their financial reporting processes. By bringing all data, people and systems into one place, finance teams can stay organized and optimize decision-making and collaboration.
What are the benefits of technology-based solutions when it comes to financial reporting?
Undergoing digital transformation and investing in technology-based solutions to improve financial reporting can bring many benefits to CFOs, including enhanced decision-making, finding significant insights faster and working more collaboratively across finance teams. The common theme among these benefits is saving both time and resources—for CFOs and their teams. It can also replace the outdated processes that kept your organization disconnected and disorganized.
Additionally, a digital approach to financial reporting can drive value for your organization more broadly. With a traditional “push” approach to reporting, stakeholders must request information from the finance team. An integrated digital platform enables a “pull” approach to reporting: managers across departments can pull the information most relevant to them in real time. This results in less siloed departments, more informed decisions and better execution of strategic objectives.
With spiraling inflation and market volatility, proactivity and agility are critical for effective financial planning. Digital tools improve the accuracy of forecasting, allowing companies to better predict cash flow and free up capital accordingly. Financial reporting technology solutions can also help manage any future crisis facing the industry without the need for another total transformation of financial systems and processes.