Why automating compliance can unlock strategy for CFOs

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Zoho’s Sivaramakrishnan Iswaran says digital finance platforms are reducing the time CFOs spend on reporting.

According to Sivaramakrishnan Iswaran, global head of Zoho Finance and Operations Suite, traditionally, CFOs focused more on quarterly or monthly reporting and compliance. Many of these activities are backward-looking, and time intensive. “But times are changing. With a digital finance platform, reporting and compliance can be put on autopilot mode. This has drastically reduced the time spent on preparation for these tasks,” says Siva.

This means that finance teams need not worry about compliance, or about applying the right tax rate for customers from different regions.

“Since the entire thing can be automated for the finance teams, the role of a modern CFO has evolved into actively participating in various business decisions, and providing continuous feedback like how it impacts the bottom line now and in the future.”

Siva says that the core responsibilities of a CFO are to focus on cost, compliance, and control. CFOs are responsible for their organisation’s spend, and must reduce the cost for the company as much as possible, make sure that the organisation complies with various rules and regulations, while having complete visibility and control over their systems.

A modern finance platform can help CFOs on all three fronts. It can help CFOs manage costs by providing 100 percent visibility into the spend. And, on the travel and expense management side, a system can enforce company policies, and prevent frauds.

Digital finance platforms are also compliant by design, which means that the companies using them will not only be compliant with today’s regulations, but any regulations that may come into effect in the future. Moreover, the CFO can create the visibility of what costs have been incurred, and how this is impacting the bottom line. Based on this, they can control and streamline the processes.

In fact, a modern digital finance platform can help CFOs go beyond achieving the core responsibilities, and ensure that their business can stay competitive in today’s fast-paced market. Siva says, “A modern finance platform can help in seeing the different changes taking place in a market, and also identifying the various challenges and opportunities.”

Siva emphasises that, “Business strategies have evolved to increase revenue, and this revenue comes from customers. Typically, the CFOs won’t participate in any of the customer-facing functions, but if you actually look at finance, there are multiple customer touchpoints.

“Let’s take billing for example. A digital finance platform can make things easier for customers, right from sending out an invoice to making it easy for them to pay online or providing them with a cash on delivery option. This is how digital finance platforms can help CFOs play a strategic role by empowering the business.”

When you compare this to a traditional ERP system, they are considered monolithic. It can take months to implement them, and the cost of system integration is high, he says. By contrast, a modern finance platform like Zoho allows you to have your ERP running, and you can transition important parts of your finance like accounts receivable. This can slowly extend to other modules like accounts payable. This offers a gradual transition from your old system, so that implementation becomes an evolution rather than a revolution.

Siva points out that legacy ERPs are not adaptable to change. For example, when there are new tax rules in a country, companies that use legacy ERPs find that their systems are not adaptable to change. A digital finance platform, on the other hand, offers tax compliance right out of the box, and also offers greater interoperability with third-party systems, which is usually time and cost-intensive for legacy-based ERPs.


Underlying technologies that are powering this digital transformation

Cloud technology is a big enabler and has made a huge difference. Apart from this, there is mobile technology, data connectivity, AI, and machine learning for automating tasks, and governments from across the world are encouraging the use of technologies.

“Governments are playing key roles in digitisation. Examples of this include the open banking regulations, which allow customers to have access to their banking data. Another good example is the digital payments evolution in India, which has resulted in the majority of payments being made through UPI today.”


It’s the thinking of a business owner or CFO that matters

If a CFO is broad-minded and innovative, they can actually leverage technology, says Siva: modern-day CFOs need to constantly look at how multiple factors are affecting the bottom line. That way, they can more rapidly decipher the challenges and opportunities in the market, and find ways of leveraging these for the business.

For example, if a competitor is providing a discount, CFOs need to offer insights on whether the company can provide the same deep discount, or offer the product for free, and provide inputs on how this is going to impact the bottom line.

“One of the best things about technology is the fact that it has democratised the availability and usage of software,” says Siva. “What was once available for large companies is also available today for small companies at an affordable cost.

“At the end of the day, the only thing that matters is the forward-thinking ability of CFOs. This allows organisations to leverage modern technology like digital finance platforms, and reap huge benefits.”

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