LucaNet unpacks why companies should be using financial perfomance management tools.
1. Reach deadlines easier and faster
The nature of finance requires gathering financial data and running necessary calculations in accordance with accounting rules. Most finance professionals spend their day copying and pasting numbers across multiple spreadsheets. Having to do this multiple times for monthly, quarterly, and annual reporting results is repetitive and mundane work. However, these are still necessary tasks to complete in order to successfully deliver financial reports. McKinsey estimates that in about 60% of occupations, at least one-third of the constituent activities could be automated. This applies to group finance teams as well.
With an FPM solution in place, the software does all the copying and pasting for you. Your FPM solution will be able to put all your financial data in the right places and automate financial calculations based on various international accounting standards. The major benefit of an FPM solution is significant time and cost savings as processes that usually take days and weeks can be completed in a fraction of the time.
2. Gain full visibility of your company’s performance
Another key benefit cited by users of FPM solutions is that FPM software can improve data connectivity, allowing group finance leaders to gain full visibility of their company’s performance.
Group finance teams are often at the mercy of their subsidiaries in terms of collecting financial data. Having to collect data from reporting packages across multiple regions, causes delays in the finance process. Furthermore, there is often limited visibility on the performance of individual subsidiaries. It is also common for subsidiaries in different geographies to rely on different ERP systems.
Hence, the role of an FPM solution is to extract all relevant financial data directly from the ERP systems with the ability to drill down on individual transactions to fully understand the postings. An FPM solution like LucaNet uses the Extract-Transform-Load (ETL) technology to retrieve, transform, and group these financial numbers.
3. Scale your finance department with the business
Other than resolving current challenges, it is also important for finance leaders to think about how FPM investments can benefit them in the long run. A key future benefit CFOs can stand to gain from FPM solutions is the ability to scale their finance team without hiring.
As businesses grow, the team often grows in parallel. One question finance leaders should think about is; does throwing in an additional headcount help to gear up the team for more work that is to come? Costs such as recruiting, salary, benefits, taxes, training, and time are involved when adding new team members. If work is still done in the same manner, adding an additional member to the team is like adding an extra runner in a relay race. It does not guarantee better results.
Utilizing FPM software fundamentally changes the way work is done in the finance department. As the company scales up, the FPM solution handles the increase in financial data with ease. In the event that additional team members are hired, they can be allocated to more value-adding activities as opposed to handling higher volumes of manual iterations in the process.
4. Setting a good foundation for financial analytics and business intelligence
Business Intelligence (BI) and analytics are all the craze right now. With powerful visualization tools, businesses are fully equipped to make data-driven decisions. Having an FPM solution ensures the accuracy and completeness of your financial data – which are key components to a meaningful analytics roadmap.
We cannot stress the importance of having the right data before jumping into BI enough. As the saying goes, rubbish-in, rubbish-out. Finance teams should ensure that they are setting the right foundation in terms of financial data cleanliness. With an FPM solution, data validation can be conducted easily, creating the right building blocks for better analytics.
Investing in an FPM solution pays off now. Adopting the right solution will provide benefits to your organisation for now and in the future. Be sure to contact us and/or join us at Finance Indaba 2022 to find out more about LucaNet FPM.