Real Reward Of Finance Automation: An Intelligent Enterprise, Not Less Headcount

Ido Shamgar

Part 3 of the four-part series “CFO Intelligent Enterprise

Finance organizations have long been responsible for a wide range of activities. Covering everything from the routine and transactional to regulatory and risk management, the staff has been primarily overburdened with an endless cycle of repetitive work, leaving little room to act strategically and position the business more competitively.

Through the lens of this reality, it’s not surprising that many CFOs are embracing automation technology such as machine learning. In fact, according to McKinsey & Company, emerging technologies can automate 42% of the function’s activities fully and 19% of them mostly.

However, CFOs also realize that their teams’ expertise and skills are more valuable to other areas of the business. Oxford Economics’ survey of finance executives, “How Finance Leadership Pays Off,” echoed this sentiment, stating “nearly half of companies with zero or negative revenue and profit growth say finance function isolation keeps them from achieving their business goals.”

Deepening the value of automation

There is so much more untapped value from automation that is just waiting for finance to realize. So instead of automating to reduce headcount and costs, maybe it’s time to drive the value your business needs to run as an intelligent enterprise.

Take a look at how machine learning can turn five foundational finance capabilities into the drivers your business needs to move toward a competitive future built on foresight, speed, and agility.

1. Finance planning and analysis

Enable an anywhere, any-device, mobile-first, role-based user experience that simplifies and enhances employee engagement and productivity while providing a consolidated view for better decision-making.

You can deliver the level of data visibility and availability your business needs to drive appropriate cost avoidance, mitigation, and austerity actions in real time through:

  • Reduced presence of information silos across business units
  • Elimination, or near-elimination, of errors in financial forecasts
  • Lower costs to support budget management, forecasting activities, business and operations analysis, and reporting

2. Accounting and finance close

Reengineering and simplifying business processes can yield significant benefits by transforming latent, static, batch-driven methods into real-time operations based on actionable insights.

By eliminating effort-intensive reconciliations, decision-makers can tap into an accurate, intraday view of their organization’s performance, as well as overall business results, through operational improvements such as:

  • Reduced audit costs by using one universal journal entry for general ledger, controlling, asset accounting, and material management items
  • Fewer days needed to close annual books, thanks to less reliance on end-of-period batch processing
  • Lower costs related to the general ledger and finance closing with a foundation for soft close capabilities – for example, real-time derivation of profitability characteristics, extension ledger, and consolidated group results
  • Decreased costs for business and operations analysis and reporting by introducing predictive analytics and dashboard

3. Treasury and financial risk management

Pull together your treasury and financial data to manage exposure and mitigate risk from a central source for forecasting and controlling cash and liquidity positions, foreign-exchange changes, commodity price fluctuations, and contractual requirements and updates.

Greater visibility with an accurate and integrated source of the truth empowers employees to make better investment and strategic decisions that drive competitive outcomes, including:

  • Reduced risk due to real-time visibility into cash positions
  • Lower treasury and cash management costs through enhanced liquidity forecasts and integrated real estate data
  • Fewer unnecessary capital requirements by automating the basics of regulatory compliance for foreign currency hedge management and accounting for U.S. GAAP
  • Lower bank fees enabled by centralized bank account management practices that simplify and automate bank reconciliations, correspondence, and workflows

4. Finance operations

Connect your receivables management and payables processes – from dispute resolution and credit risk analysis to bad debt identifications and clearing – to create a single, interconnected, end-to-end process to run proactive financial operations.

By using one source to develop innovative strategies and growth plans, the business can leverage intelligent receivable-matching automation to open up a range of advantages, for example:

  • Reduced days sales outstanding, as well as receivable write-offs and management costs, through integrated external data providers and other data sources that simplify, harmonize, and improve business-wide collaboration
  • Lower accounts payable costs with a consolidated view of multiple invoices, suppliers, and vendors; centralized liquidity planning in a unified finance system
  • Decreased real-estate management costs by establishing rules for compliance reporting and decision-making
  • Fewer spend-related transactions by adopting a shared framework that standardizes and syndicates best practices across departments, including procurement and HR

5. Enterprise risk and compliance management

Protect your business and bottom line by helping every organization seamlessly adapt to changes in technology, regulations, security practices, and the economy.

Uniting systems and processes across the organization increases transparency into emerging risks and compliance accountability to:

  • Limit single, high-value fraud with customized predictive detection governed by predictive algorithms that identify potential cases based on historical data
  • Reduce capital and effort required to ensure regulatory compliance by streamlining, automating controls, and aligning risk to business value drivers, regulations, and policies
  • Reduce violations and resulting fines through faster processing of high-volume data to deliver real-time visibility, high-quality insights, and reliable controls
  • Deliver more cash to the bottom line through embedded international trade processes for imports and exports

Redefining finance as the center of the intelligent enterprise

To say that we know how machine learning will impact every aspect of finance and the rest of the business, we would need a crystal ball. But we can envision how the technology can be best used to answer today’s challenges, advance business improvements, and take advantage of new opportunities. And without a doubt, CFOs can address all three with machine learning by flexing finance’s strategic muscle in every area of the business.

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 and SAP S/4HANA Cloud 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.