Driven by various factors, organizations globally are undergoing transformation like never before. Digital disruption is questioning the status quo of established markets and redefining business models. As a result, traditional business processes, IT applications and accounting principles are fast becoming outdated.
The evolving accounting regulatory landscape and the insistent focus on cost and efficiency are making it imperative for organizations to renovate their Finance and Accounting (F&A) operations and establish efficient processes within their systems. To do that, they need to identify the gaps and leakages in their current F&A processes and thereafter, streamline, optimize and transform the processes by setting up best-in-class operating models.
The transformation roadmap to best-in-class operating model
CFOs today are looking beyond efficiency benefits achieved through traditional outsourcing to drive transformational value in the F&A operations. They are looking at partners who can understand and analyze their F&A processes end-to-end, and accordingly, propose a transformation roadmap built on process delivery excellence, robust technological capabilities, deep domain expertise, and operational benchmarks.
The best-in-class operating model asks for efficient knowledge capture and process management. Therefore, organizations should use business process knowledge management tools to maintain a single repository of the process knowledge information, enabling smooth functioning of F&A processes. Knowledge management tools enable organizations to simplify and harmonize complex processes and derive maximum value out of the existing systems, thus ensuring improved productivity and increased ROI.
Artificial Intelligence (AI) helps organizations identify procurement inconsistencies, payment mode discrepancies and operational anomalies, to name a few. This leads to more savings, faster output and better efficiencies in an organization’s F&A function.
In order to move the F&A processes to the best-in-class model, it is important for organizations to compare their current account processes against the best-in-class measures and metrics. The benchmarking helps organizations in framing ideal end-to-end process flows required to improve their financial metrics. It provides them with insights on industry-best practices for efficiently running their F&A operations, which in turn results in increased working capital, reduced cost of operations and improvement in their P&L (Profit and Loss) statement.
The benchmarking metrics along with a framework to map evolution of the processes help organizations assess their as-is process maturity as against the best-in-class market leaders. With this framework, organizations can identify the gaps in their current process flows, which might be affecting their cycle time, period close, as well as the overall company financials. The framework will capture these gaps and suggest organizations the necessary steps to move to the best-in-class stage.
Clearly, building a best-in-class operating model requires strong process improvement methodology laid out in a standard framework. To transform an organization’s F&A function from an ‘as-is’ model to a ‘best-in-class’ operating model, the focus should be on
- Highlighting required control and compliance, which ensures integrity in an organization’s financial numbers
- Improving organizational financials by increasing the working capital
- Enhancing operational efficiency by increasing productivity and the cycle time of activities across F&A processes
- Highlighting areas to automate; eliminating non-value added activities
These, together, result in reduced exceptions and disputes, faster query resolution, enhanced visibility on operational performance and as a result, increased stakeholder satisfaction – the ultimate goal of any business!