Future-proofing your finance team: What, how, and why?

How do you future-proof your finance team?  

To future-proof a finance team, organisations must shift from manual, backward-looking reporting to automated, forward-facing strategy. This involves adopting cloud-based financial software to automate routine tasks, leveraging real-time data analytics for accurate forecasting, and upskilling finance professionals to act as strategic business partners across the entire organisation. 

The role of the Chief Financial Officer (CFO) has expanded far beyond traditional bookkeeping. According to recent industry research from PwC, 73% of CFOs now view the digitalisation of their finance function as their top priority to combat economic volatility. Furthermore, Gartner projects that by 2026, 80% of enterprise finance teams will rely heavily on artificial intelligence and cloud-based automation to manage daily operations. 

The most effective finance teams now focus on forward-looking analysis to generate strategic insights and opportunities, achieving the perfect balance between cost-cutting, risk management, and agility. For finance leaders looking to modernise and solve their department’s biggest challenges, this new way of looking at finance plays a crucial role. 

What is the modern finance function? 

A key objective within modern finance is to streamline and automate routine, repetitive accounting tasks. This involves transforming the role of the finance department so it has a broader, more strategic impact across all organisational departments. 

The focus of today's CFO has shifted from managing transactional activities to delivering strategic insights for better decision-making. Utilising Cloud-based accounting software enables businesses to automate their financial processes, providing clearer visibility into essential accounting procedures. 

Forward-looking, automated data analysis 

The modern finance function digs deeper to gain a broader understanding of business processes and patterns. Finance teams can now focus on important strategic tasks such as cash flow management and forecasting market conditions. The automation of time-consuming manual processes has made it easier for teams to focus on what’s truly important. 

Previously, most of the team’s efforts were focused on data collection. But through technological innovations such as artificial intelligence, they are able to analyse information and create useful insights. For instance, with account reconciliations, the Cloud allows for detecting discrepancies by collecting information from all possible sources—including ERP systems, bank files, and statements—in real-time. The finance team can then use their extra time to analyse the differences rather than manually hunting for them. 

Real-time communications and cross-team collaboration  

The role of the CFO has changed to be highly collaborative. Thus, it is logical that finance teams collaborate more with other departments such as marketing, operations, and IT. 

Building relationships between departments makes processes more efficient. This expanded collaboration gives finance professionals more influence in the organisation. By understanding the viewpoints of different teams, they can better contribute to wider decisions and business growth. 

(Further Reading: To understand how to build these cross-departmental relationships, read our guide on Best practices when restructuring a finance team.) 

The difference between backward-looking and forward-facing finance 

To truly future proof your team, you must understand the shift in operational mindset: 

Backward-looking finance: 

• Conventional approach primarily involving reporting and assessing past data. 
• Reactive rather than proactive in financial management. 
• Focuses on ensuring regulatory compliance and risk management. 
• Limitations include potential missed opportunities for cost savings, process improvements, and growth initiatives due to reliance on past data. 

Forward-facing finance: 

• Focuses on collecting real-time financial insights. 
• Leverages data analysis to support strategic financial decisions. 
• Utilises continuous accounting to anticipate and address potential issues proactively. 
• Adds value to the company through innovation, customer focus, and inter-departmental collaboration. 

How to structure a future-proofed modern finance department  

The finance team is tasked with tracking how well the business is doing. But there is also a burden on the finance function to accelerate organisational growth rather than just monitoring how things are going now. Therefore, there must be a framework and scalable solutions to accomplish this goal. 

Here are the steps CFOs must prioritise to succeed over the coming years: 

Review what changes are necessary 

It takes clear knowledge of where you are, what you're doing right, and what you need to change in order to build a modern finance function. CFOs should assess what changes are necessary to shift finance further into value creation. This includes addressing challenges associated with legacy systems and identifying the required resources to make change happen. 

Embrace digital transformation 

To address the opportunities and disruptors that define business today, you need access to tools and technologies that transform big data into actionable insights. In the Cloud, data analytics and metrics can reveal new opportunities for supply chain optimisation, asset allocation, and strategic development. 

Facilitate modern finance strategies 

The finance managers of tomorrow will need to have a wide range of versatile skills across business units as well as strong human resource and conflict resolution skills, and an overarching understanding of business strategy. 

For the finance function to adopt new roles and skills, you must offer both support and instruction. Consider empowering your finance staff with ongoing education in financial management and skills training. 

Automating financial planning and forecasting will free up your team's time and talents to focus on more strategically valuable tasks. Your company's financial performance data can help you improve your balance sheet, guide new business decisions, and inform new business strategies, so be sure they have the expertise and tools to leverage analytics effectively. 

Consider the skills your department needs  

The finance managers of tomorrow will need to have a wide range of versatile skills. Employees will need to focus on: 

• Agility: Rapidly adapting to new technologies, practices, and business models. 

• Data-driven analysis: Employing advanced analytics and reporting tools to obtain real-time financial insights. 

• Innovation: Utilising cutting-edge technologies to accelerate financial operations. 

• Strategy: Providing analysis and advice to help the organisation move in the right direction, such as assisting with mergers and acquisitions. 

New opportunities and challenges for forward-facing CFOs   

Finance leaders have always had responsibility over financial success, but during turbulent economic times, 53% of CFOs state they wish they had greater agility for better operational resilience.  

Opportunities 

• Leveraging new technologies: CFOs can leverage AI, Machine Learning, and data analytics to improve the accuracy of projections. 
• Automation: Digital tools allow CFOs to automate mundane financial processes, streamlining operations. 
• Broader contribution: This modern approach gives CFOs the time and confidence to participate in broader strategic elements, such as technological investments. 

Challenges 

• Data management: Tracking and analysing a large amount of financial data can be challenging alongside increasing regulatory complexity. 
• Talent management: Given the rapid evolution of technology, CFOs may find it challenging to build and retain a team with the required digital skills. 
• Complex change management: Putting new digital solutions in place demands significant organisational change, which often attracts resistance. 

Continuing to look ahead 

In this challenging climate, CFOs can only be successful by embracing innovation and forward-thinking financial management. Cloud technology has a crucial role to play in facilitating this. With the Cloud, finance departments can store, access, and process vast amounts of data in real time, allowing leaders to tap into insights that are accurate and current. 

OneAdvanced's Financials is a cloud-based accounting software that enables your finance team to proactively traverse the future business landscape. With automation, powerful reporting, and strategic insights, your team can become a truly forward-facing, future-proofed function. 

Frequently Asked Questions (FAQs) 

What does it mean to future-proof a finance team?  

Future-proofing a finance team means equipping it with the technology, skills, and processes required to adapt to future economic changes. It involves moving away from manual data entry and historical reporting, and moving towards automated, cloud-based systems that provide real-time, predictive insights. 

What is the difference between backward-looking and forward-facing finance?  

Backward-looking finance focuses on historical reporting, compliance, and assessing past data. Forward-facing finance uses real-time data, predictive analytics, and automation to forecast future trends, anticipate risks, and drive strategic business decisions. 

What skills does a modern finance team need?  

A modern finance team requires a blend of traditional accounting knowledge and new digital skills. This includes expertise in data analytics, cross-departmental collaboration, strategic planning, and a strong understanding of cloud technologies and automation tools.