Improvement for improvement’s sake may be a noble ideal, but that’s not what’s driving the desire to make the most out of finance operations—the slew of activities coming under finance’s umbrella that make the company run. These include traditional activities such as accounts payable and accounts receivable, compliance, and cash management. But increasingly, finance leaders are also breaking through process or functional walls and looking at the total picture, taking a keener interest in how a well-run finance operations organization can influence things like procurement, supplier relations, and even net income.
CFO Research, in collaboration with SAP, surveyed finance executives from mid-sized and large companies around the world on their views of their own finance operations functions. And writing in the survey,* the CFO of a U.K. construction company said that “[management] need to understand that, without a world-class finance function, they will struggle with cash flow.” That’s an outcome that gets at the heart of how the business is run. It behooves the finance leader to ensure transactional performance fuels effective business operations rather than holding it back.
The executives taking our survey certainly believe it’s important—eight out of ten respondents said that improving finance operations should be one of their companies’ top priorities. They traced the impact of efficient and effective finance operations directly to business-critical functions such as business process execution and cash management, in addition to controlling process costs.
These impacts can help grow net income and improve profit margins, whether directly through cost reductions or indirectly through smoother business operations and ultimately, stronger satisfaction ratings from both suppliers and customers.
As a CFO from the financial services industry insists in our survey, the time has come for the finance operations to take the next step in its transformation, moving beyond the “purely administrative and tactical” and into the realm of the strategic.
Read the full report: Build High-Performing Finance Functions.
For more insight on the future of service industries, see Workforce 2020: Professional Services.