An organization struggling to manage timely financial reporting or ease the burden on a stressed accounting department could benefit from finance transformation.
Growth can also present challenges to dated or inefficient department practices; it’s not easy to scale up on paper. During the COVID-19 pandemic lockdowns, businesses found digitizing essential functions helped to cope with a suddenly remote workforce.
A tight labor market underscores the fact that siloed information makes personnel changes more challenging, making the visibility and transparency of a finance transformation necessary.
What Is Finance Transformation?
Finance transformation is the process of analyzing a finance team, identifying roadblocks, and creating systems and process that will help the business run more efficiently and effectively.
Finance transformation creates solutions for an organization struggling to align its accounting, finance department, or technology with its goals.
What Are the Benefits of Finance Transformation?
An ineffective accounting department impacts the whole organization.
Digitizing financial operations means processes aren’t dependent on a specific location or a single person. For example, a finance transformation effort can automate invoices, opening the flow of money and freeing stakeholders to track and analyze budgets.
Up-to-date financial statements also have a positive effect organization-wide. If the executive team has recent, accurate data—how much money is available and where—they can make better business decisions.
Sales departments can better track goals and follow forecasts, and programs departments at not-for-profit organizations can verify their spending obligations or compliance needs are met. When the leader of the finance department isn’t mired down in supporting inefficient processes, then they can focus on supporting the CEO and the organization’s future growth.
What Major Events Trigger a Finance Transformation?
Finance transformation could be necessary due to:
- Major acquisition
- Shift in operating model or business plan
- Chronically late audit reports
- Need for visibility into financial processes and systems
- Enterprise resource planning (ERP) solution upgrades
- Financial software improvements
- Changing roadmap for finance capabilities
What Does the Finance Transformation Process Include?
Finance transformation steps vary depending on the organization and the reason to want the change.
Typical steps include:
- Confirm expectations around timing and outcomes
- Identify the reasons driving the change
- Assess the current processes, tools, and staff
- Analyze the state of the organization
- Share observations and develop recommendations
- Present an implementation and change management plan
What Is a Finance Transformation Roadmap?
Moving an accounting or finance department from paper, spreadsheets, or complicated processes takes careful planning and a full understanding of the entire organization, not just the accounting department. A finance transformation professional can help guide a company through the process with a finance transformation roadmap.
Phase 1
Create a plan with a scope, approach, and timeline. Identify which areas and staff members should be observed and interviewed.
Phase 2
Start the discovery process by analyzing relevant documents and observing processes. This includes interviews with the accounting team and any teams they interact with heavily, such as operations or programs, to identify pain points.
Phase 3
Analyze observations and develop recommendations. Benchmark the results to peer organizations.
Phase 4
Present observations and recommendations, and follow-up with coaching and change management assistance.
These steps are also helpful if the organization initiated the process by buying accounting software but found roadblocks during its implementation.
What Do Finance Transformation Consultants Do?
A finance transformation consultant can take a high-level view informed by broad experience in assessing a company’s needs.
A finance transformation consultant who has worked as a controller as well as a CPA, for example, could connect with staffers and understand roadblocks and pain points.
Consultants work with stakeholders to plan, assess, analyze, and implement the transformation, and provide leadership coaching during implementation.
M&A Assistance
Consultants also step in before, during, or after an acquisition.
They can help:
- Merge two finance departments
- Envision a new merged accounting department
- Perform due diligence before a purchase
- Facilitate process transformation after a purchase
A successful finance transformation can help improve morale and communication in addition to streamlining budgeting, invoicing, and other finance department tasks.
Other changes include:
- Visibility into budget versus results
- Better alignment of duties and roles
We’re Here to Help
To learn more about how finance transformation could affect your organization, contact your Moss Adams professional.