Finance is a crucial sector for any organization. Without it, a company would be absolutely lost when managing cash flows, creating budgets, maintaining records, and creating financial plans for the future. As the advancement of technology surges and financial practices become more sophisticated, it’s only natural for finance teams to undergo their own metamorphosis. As you can see, the role of finance is evolving and morphing into a more strategic player within an organization.
Previously, finance teams were viewed as necessary number crunchers that kept tabs on a company’s metrics. Today, this role is evolving and working to paint a clearer picture of the organization’s overall financials. This necessary shift provides deeper insights and supports better decision-making among senior management. In addition, by incorporating innovative technology like FP&A software, finance teams can shine a light on the importance of accurate forecasting and business planning to support the growth of an organization.
So, what is the future of finance and how is it evolving? Our experts at Abacum are here to break it all down for you.
Shifting Towards Emerging Technologies
Previously, finance teams spent weeks compiling data from their HRIS, ERP, BI tools, and other platforms to create their forecasts. As you can imagine, this process was painfully tedious. It was also prone to error, which meant financial forecasts often had inaccuracies that skewed predictions. Today, technological advancements are paving a more automated and efficient path.
Technology is trickling through every industry, and that is no exception when it comes to finance. This sweeping digitization is evolving how the financial system operates within an organization, helping to free up critical resources for more strategic business planning and analysis.
In order to combat pain-staking manual data processes, finance teams are integrating innovative technologies into their financial planning practices. This new finance transformation is changing the way professionals conduct their daily work. While this wave of new technology welcomes the use of software to streamline data analytics and provide a company with greater insight, finance teams must be open to these groundbreaking adjustments. By adapting to new technology, finance professionals will spend less time on manual data processes and spend more time on value-added activities.
Automating Forecasting & Planning
Automation is the engine that drives critical change for a finance team. Previously, when it came to financial forecasting, budgeting, and planning, an FP&A manager had to dig through their data systems and chase team members from other departments to do their job. This fragmented process was inefficient and lacked cohesion across all participants.
Now, financial automation tools are taking center stage and evolving traditional forecasting practices. Instead of reaching outwards to pull data, finance teams can now analyze their metrics from a single, internal platform. Some software even offers communication features directly in the platform, which improves collaboration across all team members. With the right FP&A tool, you’ll be able to integrate your entire tech stack into a single solution. Manually diving into each individual data system to pull metrics is now a thing of the past. By taking advantage of FP&A integrations, finance teams will finally be able to work on what they were hired to do all along - financial analysis and strategic planning.
It’s important to note that artificial intelligence, machine learning, and advanced predictive analytics come with financial automation technology. By taking an integrative approach to these emerging technology advancements, finance leaders will be able to improve efficiency and take on more value-driven projects.
Embracing FP&A Practices
FP&A, or financial planning and analysis, is the process of forecasting business performance to support crucial decision-making for company executives and senior management. While this role was always a part of the finance system, FP&A is now gaining momentum as markets become increasingly unpredictable.
As we’ve seen with COVID-19, teams need to be agile to adapt to what-if scenarios and changes in their environment. By embracing FP&A trends and hiring a strategic team of FP&A analysts, organizations can adequately plan for the future and adjust their business strategy accordingly.
Today, companies everywhere are investing in FP&A roles to support their organization. The primary purpose of an FP&A team is to gather, transform, and analyze financial data from different departments such as marketing, sales, operations, HR, and more to create strategic forecasts.
This holistic approach surfaces the importance of finance across all organization teams and helps align company-wide goals among senior management. Instead of taking a team-by-team approach to business planning, FP&A helps to strip down data silos and organizational barriers to help improve financial transparency across all team members.
Expanding the Financial Role
Now that financial processes are evolving, finance teams will start to take on more responsibilities and engage with different stakeholders. Financial executives will provide more cross-functional support to other departments and serve as strategic decision-makers alongside the leaders within an organization. Instead of being head-down in excel sheets, the finance team will transition to take a more strategic approach to improve performance across all employees. This shift allows finance teams to have a greater impact on an organization and support business planning like never before.
While finance teams used to stay in their individual cohort, these teams are now creating synergy across the entire organization. By sharing predictive analytics and aligning company-wide goals, finance departments are helping to improve collaboration to support data-driven decisions.
How to Modernize Your Finance Team with Abacum
If your finance team is looking to stay ahead of the curve, incorporating FP&A software into your operational processes is the perfect solution. Financial planning software can help automate traditional data processes from start to finish. Not only will this adoption help free up critical time for the finance team, but it will also allow finance leaders to evolve their role and become more strategic players within an organization.
The finance industry is in a progressive transition. If your finance team is still following traditional practices, you may be risking falling behind. In order to keep up, your team must evolve. By pushing for a more modernized financial team, you’ll be able to improve efficiency, data accuracy, and financial forecasting for the future.
If you’re ready to revamp your financial planning and analysis practices, Abacum can help. To learn more about our product and how it can support your team, request a demo today.