The Criticality of Leveraging Technology in Real-Time FPA & Reporting
Today, the finance function in most organizations has transitioned from being just the custodian of books of accounts. It’s now a strategic growth component with a role to play in every facet of business activity.

Achieving good business success requires planning and launching a host of customer-centric initiatives that drive sales. The CFO is often regarded as the core pillar that allocates the right funding to keep a check on the right sizing of these initiatives, ensuring that the company’s financial health is stable even when venturing into high-risk waters. The extensive strategic role of the finance function in all areas of business activities puts Financial Planning and Analysis (FP&A) into the limelight for today’s businesses.

Modern FP&A approaches aim to bring financial accounting, operations, and market dynamics under one roof to build the healthiest financial trajectory for the business. As with any enterprise function that attempts to succeed at scale, FP&A needs to leverage technology to guarantee success. Let us evaluate how technology can play a key role in FP&A reporting in modern enterprises:

Rise of Autonomous Finance

Automation is still a critical part of the technology ecosystem in finance, but modern financial, planning and analysis initiatives can certainly perform better with an even more advanced form of automation. This is where autonomous finance comes into the picture. In simple terms, autonomous finance refers to the ability of financial systems to autonomously decide on transactional processing by leveraging a range of technologies like AI, Machine Learning, Natural Language Processing, Semantic analysis, etc. to name a few. However, it doesn’t imply that a human touch will be eliminated from FPA initiatives, but rather autonomous finance functions will enable decision-makers to make better plans and implement efficient governance.

Boosting Efficiency Through Digitization

Gone are the days when financial models were built by CFOs using basic spreadsheet programs. As discussed earlier, finance requires a more holistic and strategic approach to contributing to business growth. This can be easily achieved by bringing on board digitization solutions like an ERP solution which helps in building the basic foundation of data-centric business behavior. This can further translate into new business strategies over time thanks to the ability of businesses to run powerful analytics on the data thus acquired.

Improving Compliance and Security with Blockchain

Financial reporting mandates one of the highest levels of transparency and compliance with established standards and norms in the business world. Enabling this transparency and compliance would necessitate the use of a secure and immutable network of data exchange within the enterprise to deal with data from different sources and guarantee its integrity.

This is where solutions built with blockchain technology can help in redefining transparency and compliance with FP&A reporting. With blockchain’s highly immutable and decentralized working, it is ideal for establishing the core data exchange architecture to support business growth.

Reduce Risk Through Automation

One of the biggest challenges that FP&A reporting must endure is the risk of manual processes for data collection and processing. With automation, however, enterprises can eliminate this challenge by removing biased or inefficient data management in all departments.

Bringing on board the right business systems at each department, empowering employees to collect and organize data through these systems, and mapping data flows from the system to the right enterprise data channels is all that needs to be done.

By leveraging technologies like RPA, enterprises can use intelligent bots to carry out repetitive data collection, organization, and entry tasks, thereby relieving human employees from having to engage in manual data tasks and ultimately reducing risks.

Cloud for Scalability

Traditional FP&A reporting solutions were hosted in-house, as they only evaluated data from fewer processes and departments for effective reporting. But times have changed; today, most companies engage in multinational operations and have diverse business systems that produce data needed for financial audits and reporting.

Hence, FP&A reporting systems of today can leverage the cloud to have a more scalable and adaptable digital ecosystem capable of handling large volumes of data from different stakeholders. Besides, moving to the cloud entails FP&A reporting being globally accessible and optimized for collaboration between different teams.

Also Read: Why Your Finance and Accounting Services Partner MUST be a Technology Expert

AI in Analysis

The core of the FP&A reporting strategy is the analysis part. Financial data, when processed or computed using trusted models, helps decision-makers to develop the right budgets, financial plans, and allocations for different business activities.

However, over time, the number of dependent systems and metrics that financial models incorporate has exponentially grown thanks to other technologies like the cloud, which we have covered earlier. This means that traditional analysis of data isn’t enough to bring out deeper insights.

This is where artificial intelligence (AI) and machine learning (ML) come to the forefront. From enhancing the accuracy of financial models to uncovering hidden risks, there are several possibilities that AI can bring to the table in FP&A reporting.

Summing Up

Amid the uncertain global economic landscape, enterprises must ensure that they have a robust financial planning and reporting support system that can accommodate the scale of data generated in modern business environments.

Using technology is integral to ensure that there are checks and balances in place and that enterprises can confidently manage collaborative thinking and decision-making with respect to their financial health.

Getting ahead in the race to digitize the finance function is all-important, especially when the majority of the competition has signalled technology adoption in some capacity. Ensuring that your business doesn’t miss this bus is of critical importance.

Get in touch with us to learn how to transform your FP&A reporting architecture to reflect modern best practices.