How Finance’s Intelligent-Enterprise Mindset Fuels Smarter Processes

Ido Shamgar

Part 2 of the four-part series “CFO Intelligent Enterprise

Most CFOs are locked in a battle for the soul of the finance organization. Pivoting away from a past of data in silos, single-perspective spreadsheets, limited insights, and multiple versions of data, finance leaders are steadily rebuilding the foundation to strengthen its credibility with actionable intelligence across the business.

Transparent, limitless, and thorough data is always a highly valued asset, but it alone cannot deliver the level of intelligence CFOs want. The finance organization needs to weed out data assets and practices that may be getting in the way of the advanced analytics capability and noise-resistant information required to drive more intelligent decisions with reliable data.

But what could your finance organization accomplish by retiring half of its legacy reports and skinny down a portfolio of dozens of analytics tools? No matter the answer, all roads lead to a future where every business function comes together to run as a unified, intelligent enterprise with smarter processes.

Same game, new rules, and better outcomes

Like most organizations, finance teams measure their value by the impact of their end-to-end processes. However, they also have the superpower to transform the entire business in ways that will leave a mark on the industry – whether they are simplifying and automating processes, delivering insights at near-instantaneous speed, or answering traditionally incomprehensible impossible questions.

Take a look at three basic end-to-end finance scenarios to see how an intelligent-enterprise mindset can create a wave of transformation that can position the entire business on the right course.

Record to report

This set of processes focuses on the financial close – from the capture of enterprise-wide accounting data to management reporting, compliance and tax auditing, entity close, consolidation, and analytics.

While the end goal is to deliver a faster, continuous, and compliant close, finance teams often find this scenario to be highly manual, time-consuming, and effort-intensive when each step is not managed on a connected ERP platform. Close activities are delayed until a fixed period-end, reconciliation and audits are often inaccurate, and the risk of noncompliance is high – all exposing the business to substantial penalties and fines. Executive conversations are also limited to static snapshots of business performance and offline ad hoc questions and analysis based on outdated information.

By connecting the entire scenario with a common ERP core, accounting teams can close their annual books in half the time at a significantly lower cost with capabilities including:

  • Event-triggered execution enabled through real-time derivation of profitability characteristics
  • Elimination of reconciliation because one universal journal entry provides a single source of the truth
  • End-to-end visibility and steering for local periodic legal reporting
  • Continuous, self-auditing tax-monitoring processes
  • Real-time consolidation supported by instant data access from integrating transaction and master data

Plus, real-time business intelligence turns the boardroom into an interactive decision-making environment of granular, in-the-moment ad hoc reporting and what-if analysis.

Order to cash

This scenario relates to frictionless order processing from quote to cash. It includes all financial operations such as billing customers and managing disputes, collections, and evaluating customer credit risk.

Like the record-to-report scenario, order-to-cash processes tend to be highly manual, time-consuming, and effort-intensive. Customer interactions are inconsistent across the business, leading to an environment where rules-based events are difficult to establish and manage. This disjointed handling of accounts puts customer relationships at risk while driving up days sales outstanding, collection costs, bad-debt risk, and accounting and settlement errors.

Accounts receivable teams can reduce days sales outstanding, bad debt write-offs, and organizational costs by adopting a unified data and transactional platform that supports scalable, standardized processes such as:

  • Multichannel, role-based access to accurate, real-time information on products, pricing, customers, and contracts
  • Event-triggered execution and full automation of creditworthiness assessment
  • Payment portal and e-billing, which provides real-time access to account details and accelerates payment processing
  • Centralized information repository to analyze the root cause of disputes and gain visibility into customer status
  • Smarter automation and collaboration for cash collection such as next-generation intelligent invoice-matching powered by machine learning

Procure to pay

These processes are the core of compliant and efficient collaboration between the buyer and supplier. Connecting trading partners helps to ensure that purchase practices follow all policies and regulations while finding best-fit suppliers, verifying delivery, and settling obligations with streamlined accounts payable processes.

From the request for good and services to discounts and payment transactions, the entire procurement experience has to be seamless, transparent, and accurate. Poor user experiences lead to lower adoption of procurement systems and practices. Plus, lack of visibility and slow approval cycles mean lost opportunities for cost savings.

Guided by a single, intelligent platform, procurement organizations can optimize savings through discounts and timely payment while lowering accounts payable costs and expenses through process improvements, for example:

  • Access to an online marketplace provides a consumer-grade experience
  • Instant three-way supplier and invoice matching for efficient, error-free processing
  • A small set of standard payment terms to help ensure seamless settlement
  • Holistic working capital strategy for terms extension, static and dynamic discounts, supply chain finance programs, and payment channels
  • Payments process optimized to capture discounts and yield rebates, and maximize days payables outstanding

A new world of intelligence for finance and the business

Every business competes through a broad network of strategic partnerships, representing anything from material suppliers and service providers to retailers. When these relationships are nurtured by the finance organization with the help of technology, they can scale and expand the business in meaningful, mutually beneficial ways.

Although legacy business systems were not designed to support this kind of growth, rethinking the digital foundation of the business can help. This approach to creating the intelligent enterprise not only helps ensure that every decision, payment, and partnership agreement deliver beneficial outcomes and savings, but also redefines how the business transacts competitively for years to come.

Discover how your finance organization can help the entire business experience a new normal that fundamentally changes how the business runs. Download our white paper “Transform Finance with SAP.”

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Ido Shamgar

About Ido Shamgar

Ido Shamgar is SAP’s global lead of Product Marketing for SAP S/4HANA, focusing on the Finance Line of Business. In his role, Ido develops compelling marketing programs, messaging, and content on the next-generation intelligent ERP. He is a seasoned business executive who works with companies around the world to market, sell, and deliver innovative technologies for pressing business needs.