How NetSuite’s ERP is Helping them?
Chief Finance Officers (CFOs) play an integral role in business transformation to devise new strategies for the organization. Similarly, the entire finance department steps up to take the additional strategic role to facilitate modelling the required organization mindset.
Technology plays a significant role in automating the cumbersome and time-consuming accounting calculation within the finance department. The finance team can now take up the advisory role to verify and validate data for the entire organization more efficiently and in less time with the NetSuite ERP solution.
Additional Functions for CFO
New research states that the following five additional functions should report to the CFO, including:
- Risk
- M&A functions
- Regulatory compliance
- IT
- Digitalization
Not only have that, but a majority of the CFOs worked in the following domains in addition to finance:
- Strategic leadership
- Performance management
- Organizational transformation
The question under discussion is what the main reasons behind CFOs taking up the strategic roles are? It’s not just the regulations but the latest technology and tools, including AI, cloud-planning, automation, and other reporting tools, that enable the finance department to step into the decision-making role.
Courtesy of the automation, real-time reporting ensures faster financial closure by eliminating manual calculation and data processing. Although these tools come under the umbrella of IT, the finance department controls and manages all the tools.
This way, the finance department takes up the strategic leadership role within an organization.
Role of Business Partner
Accountants have worked with different business units to streamline operations and management performance to offer the desired support and analysis. However, the traditional accounting tasks have been completely automated. That’s why the CFO and finance department can diversify the domain.
As discussed earlier, the domain of finance is being diversified to a more strategic and commercial role.
According to the PwC research, businesses that invest time in business partnering can outperform the rest of the organization by 23%, which is huge. Not only that, but the organizations can observe a visible improvement across all the domains ranging from the organization size to the maturity phase.
Moreover, if a business wants to succeed, the finance department should work more closely with the rest of the departments, thus giving more attention to the Business Partner role.
The key to achieving commercial goals is to involve the Finance team allowing it to contribute its inputs.
A successful financial department has the following characteristics:
- Cost efficiency
- Reliable and smooth processes
- Valuable insights
Based on these qualities, the finance department is competent enough to turn the opportunities and threats into the main drivers for business partnering.
In other words, the finance department takes up the advisory role in the business to assist the stakeholders and higher management in performing different financial analyses.
Business partnering is undoubtedly a demanding role that requires the finance team to develop commercial and communication skills. Moreover, the finance team should also focus on performance management and data analysis to gain market insights.
A study reveals that the finance team shouldn’t lose its objectivity while partnering with the business. Instead, it means finance should play an active role in developing different systems and streamlining processes across the business.
Market Insights by Finance Team
Gaining new market insights by performing analysis is the primary role of the CFO and the finance department, especially for high-growth businesses and, of course, start-ups. This way, the CFO offers a clear understanding of the financial outcomes of different operational and strategic decisions that lead to any organization’s expansion and success.
For instance, the availability of real-time data and other cloud-based reporting tools helps businesses to streamline and automate different traditional financial tasks, including:
- Financial planning – Offers top-down strategic plans to the business to achieve higher-level goals.
- Budgeting – Ensures proper resource allocation aligned to the strategic goals and desired outcomes.
- Forecasting – allows the business to track the expected, current, and projected performance. This way, the higher management can take a timely decision to overcome any shortfalls or increase the overall productivity and efficiency of the company.
Around 77% of the executives consider that the businesses should do the planning, budgeting, and forecasting in collaboration with the finance team. Only this way can the organization consider all the organizational risks and threats into account.
According to the research, finance can offer its valuable improvement to improve the existing planning, budgeting, and forecasting PBF process:
- Finance can offer its input to facilitate the business creating strategic goals and aligning the performance measures accordingly.
- Using Big Data, finance can streamline the integration of the PBF process to achieve high-level goals.
- Technology no longer offers static analysis; instead, it offers real-time and dynamic insights and analysis, courtesy of the cloud-based solutions. The goal is to use cloud planning and budgeting solutions to effectively deploy and scale technology solutions to improve efficiency and cost-effectiveness.
To sum up, different departments can work closely with the finance team to stay aligned with the business strategy goals and values.
How to Ensure the Above Finance Functions?
We have discussed the different roles that now come under the finance domain, including business partnering, marketing insights, and strategic leadership. However, correct, real-time, and reliable data serves as the primary foundation for the finance team.
Using modern ERP systems, like NetSuite ERP and other cloud-based finance tools, it is possible to eliminate the cumbersome reconciliation of the data in multiple spreadsheets. Not only that, the latest ERP software offers seamless integration of different tools allowing the finance team to extract real-time data and develop different accounting and finance reports.
Conclusion
To sum up, the role of the CFO and finance team is evolving, thanks to technology. Moreover, it’s becoming a commercial function in addition to the current transactional and financial role.
A modern CFO isn’t just a business partner but a business challenger who offers a great vision for the organization.
The finance team can use the available information, data, and market insights to offer valuable inputs to steer the business in the right direction.
Additionally, the finance team is evolving to serve as a business partner to define the strategic goals and align the business performance accordingly.
With the increasing number of responsibilities on the CFOs and the finance department, a modern ERP system has become a necessity. With the NetSuite customization, integration, and implementation services of Folio3 – official NetSuite partners, it’s possible to automate the finance operations and processes, thereby improving the efficiency and productivity of the business as a whole.
