5 Challenges Facing Finance Professionals

Posted by Marliesa Dougans on Apr 23, 2021 11:00:00 AM

 

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If you work in finance, you have the keys to the "city" with all the data at your fingertips. Your department is one of the few that have a lens into the overall health of the company. It is ironic that finance departments have all this information and still struggle with old data, old tools and spend most of their time reconfiguring tools, data and talent to provide the executive with the necessary financial data. 

It is harsh, and it is true, companies rarely develop finance professionals systematically; they get veteran employees that continue to operate in the same way as when they first joined a company. They don't develop Finance professionals to what business needs today. Business is fast-paced and driven with a data-first culture that uses analytics to build critical insight into their business to ensure you are ahead of your competitors. You can't do that on old data, old tools and extensive manual processes.

 

1. The need to provide real-time data

Real-time data has become all the rage nowadays. As the accounting systems become computerised, many finance departments want to provide management with information that is up-to-date to reflect the exact position of the company at any point in time.

Real-time data is something that every finance department aims for; it is not as easy to achieve. The main reason is that many departments still rely on spreadsheets for their day-to-day operations, even if duplicating work. Spreadsheets are a desktop, single-user tool playing in a big, vast world and require collaboration.

 

2. Disconnected processes

Finance attempts to forecast what will happen by acting as a surrogate for the organisation to do budgeting rather than involving the appropriate personnel from the many different departments manufacturing, sales, operations, production, etc.

Furthermore, the tools finance uses to limit the reach of these participants in the planning process. Clunky tools often force finance to act alone. Finance is the only department that knows the intricacies of these tools and doesn't want to burden the team when it is just easier to do it yourself.

 

3. Lack of visibility into key business drivers

Finance departments are often the island among islands and, as a result, isn't able to effectively collaborate with other business units to determine and create essential business driver visibility. We miss the opportunity to link what drivers matter to the different departments and functions. 

The results are often other business units plugin estimated numbers for their forecasting and budgets, which tend to flex and trend the data over time. This provides little insight and no valuable, actionable foresight.

 

4. Limited availability to dynamically adapt and redeploy resources

As mentioned earlier, spreadsheets still play a significant role in the collaborative finance environment. Resulting in manual processes and often duplicating work. Resulting in your finance resources spending days or even weeks preparing for a single executive report leaving limited to no time available to adapt to changing circumstances. 

The thought of even adopting new technology might leave the team overwhelmed and unable to adopt innovative technology to assist in these tedious manual processes.

 

5. Lengthy Manual Reporting 

Every moment you are unaware of your finances is a moment that you are at risk for failure. Based on the manual reporting processes still followed by most finance departments, should one month be delayed, the result is often a result of many delayed future reports. It is like playing Russian Roulette while you are at an increased risk. Not to mention that manual processes leave room for human error, often resulting from overbearing manual processes. 

You cannot be strategic if you are constantly in crisis management. Having real-time management reporting is invaluable to making spending and operational decisions. You have to be able to trust the reports and numbers; otherwise, what is the point?

Business is fast-paced, and being strategic is all about possessing the proper knowledge to make confident decisions.

 

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Topics: Data Management, Finance