by Navin Gupta, on Dec 8, 2023 4:51:47 PM
- The CFO is a strategic business leader responsible for financial planning and analysis (FP&A) and improving business revenue.
- The role requires having P2P, O2C, GL, and R2R data at a glance for generating perpetual cash flows.
- Unified Finance & Accounting automation platforms support the CFO in driving their objectives in maritime and market upheavals.
Today, the CFO has the onus of garnering the right support of the enterprise stakeholders for executing responsible and strategic decisions in order to avoid fallouts as in the OpenAI business case. The CFO role is not limited to financial planning and analysis, being cut off from the day-to-day transactional rut. The role is more of a strategic leader, who navigates the enterprise through complex terrains and geopolitical headwinds while being responsible for day-to-day transactions. The CFO has to take the ownership of the planning, forecasting, as well as the treasury that generates and maintains a perpetual cash flow. Hence, the individual F&A sections working in siloes, need to autonomously feed into each other to generate a real-time bird’s eye view for the CFO’s quick decision-making. An AI-powered, unified Finance & Accounting automation platform serves this purpose and enables the CFO to steer the organization using real-time data-driven insights in maritime and geopolitically sensitive environments.
How does automation enable the CFO tide over geopolitical events?
Cloud-based, Unified Finance and Accounting automation platforms ensure closures in real to near-real time and impart high visibility of the processes. The three automation modules of P2P, O2C, and R2R merge into the FP&A module enabling the CFO take quick decisions, anytime anywhere.
- P2P automation helps businesses procure raw material and manufacture products just-in-time while availing early payment discounts. Timely closure helps the suppliers support the businesses’ strategic plans.
- Similarly, the automation platforms help businesses’ to retrieve orders from different channels, assess creditworthiness of customers, split large orders in logical units, and deliver each unit after, receiving payment. The O2C automation integrates lighter payment methods enabling timely collection recovery.
- So also, R2R automation ensures timely journal entries, posting, and closures. It ensures auto-reconciliations, accruals, and imparts high transparency and visibility to processes. It institutionalizes data democratization for management reporting, trend and variance analyses.
The unified F&A platform ensures end-to-end process automation and expedites the processes from weeks to days and days to minutes. It enables the CFO to exceed the globally acknowledged F&A KPIs by a significant margin. Automation thereby enables the CFO to confidently steer the business through geopolitical turbulences and maritime while taking risks and bolder decisions.
Why is Record-to-Report automation important for FP&A?
FP&A requires the exact status of book closures and accruals as of a particular date and time to make confident and speedy decisions. Automated journal entries, validations, and reconciliations enable seamless integration of finance and accounting data with core business systems and ERPs. Autonomous R2R platforms are especially important during geopolitical turbulences and market headwinds. They are instrumental in offering the correct book status. They enable the CFO to think clearly on the basis of real-time data and analytics to take bolder decisions and calculated risks to achieve higher financial goals even during market turbulences and upheavals. The CFO can think of creating independent Treasury benches that can enable the business generate perpetual cash flow by leveraging the results of financial activity and reap the same for business expansion.
How does Procure-to-Pay automation impact FP&A?
Market upheavals affect production in a big way. The business has to maintain a list of trusted suppliers for different parts and raw material that are in step with the business’ production goals and strategies. The business has to honor the payments of their trusted suppliers in time. This is where Procure-to-Pay (P2P) automation steps in. Unified F&A automation platforms enable the business to maintain digital records of preferred suppliers and contracts. They also allow to shortlist, select, and onboard suppliers on the fly. The automation platforms are directly synchronized with the vendor portals that allow upload of invoices and other customary documents. The automation platforms also directly integrate with the supplier banks through lighter payment methods that function seamlessly during maritime and geopolitical upheavals. Timely AP closures not only help with FP&A decisions but also in maintaining trusted supplier relationships for a lifetime.
Why is Order-to-Cash automation important for FP&A during geopolitical upheavals?
Unified F&A automation platforms driven by Responsible AI automate processes from receiving orders in an omnichannel environment, evaluating the customer creditworthiness, prioritizing and executing orders to cash collection and cash application. The end-to-end automation in O2C domain enables the business to take big orders and execute them in parts after receiving the preceding payment. This approach, which is facilitated by automation platforms, enables keeping track of the transactions, maintaining audit trails, and fulfilling compliance. Unified F&A automation platforms help predict demand as well as order blocks well in advance. The approach helps better cash flow management and financial performance even during geopolitical upheavals. The O2C automation directly impacts FP&A and the CFO decision making.
How do unified Finance & Accounting platforms provide tailwinds to businesses?
Unified Finance & Accounting automation platforms source data from P2P, O2C, and R2R automation platforms in real-time. It allows the CFO to generate real-time snapshot for financial planning, analysis, and decision making. The CFO can use the data to actively create new avenues for investments and assets that serve as perpetual cash flow arrangements, which can be used to start new business projects and fulfill obligations.
How do autonomous Finance & Accounting platforms enable businesses hedge risk?
Unified Finance & Accounting automation platforms are adept at involving multiple parties for executing orders. At times, the customer may not be able to pay upfront or may be at a geographically distant location. Here, the business can involve third parties, such as banks and non-banking financial companies, and get letter of credit on behalf of the customer to release major orders. The automation platforms ensure proper checks and balances while executing orders and hedge risk in order delivery while ensuring receivables in time. Automation platforms also ensure audit trails that help businesses fulfill internal and external compliances across all manufacturing stages.
Does process centralization facilitate Finance & Accounting processes?
Economies of scale offer tailwinds to businesses. Centralized procurement and payments enable businesses save significant amounts that directly impact the P&L. However, in case of global operations the business has to maintain discretion while selecting processes for centralization and localization, especially so, when there are different regulations and tax treatments across geographies. The Finance & Accounting automation platforms can be integrated with global taxation engines for seamless performance.
How do autonomous Finance & Accounting platforms support business resilience?
Cloud-based Finance & Accounting automation platforms enable anytime, anywhere, any device execution. The platforms are built on inherent principles of business continuity. They support robust process architectures that ensure business resilience. Cloud Native and microservices architecture supports business resilience in a big way.
What are the key automation levers for a holistic FP&A view?
Holistic FP&A requires real-time data from P2P, O2C, and R2R domains. The 360-degree bird’s eye view derived from such analysis enables the CFO to take risks and strategic business decisions. End-to-End automation forms the basis of this agile and transparent business environment. The key automation levers that feed into the holistic FP&A framework include –
- Unified F&A automation platform: It offers modular architecture that can be adopted in a staggered manner. It allows businesses to re-engineer their legacy platforms and automate their individual F&A functions according to the business requirement.
- Cloud Native environment: It builds resilience in the process architecture. It offers anytime anywhere any device access. The underlying principles of Containerization and Microservices support business continuity and impart resilience to the processes.
- Modern automation stacks: End-to-End automation ensures faster closures and real-time data for decision making. Technologies, including Intelligent Automation, Artificial Intelligence, Machine Learning, APIs, Workflows, Analytics, and Visualization support end-to-end automation, agility, and transparency.
Simply put
Dynamic geopolitical environments require the CFOs to take strategic decisions. They require real-time data for taking responsible decisions and navigating the business through complex markets and business environments. Besides the daily transactional activities, the CFOs have to be responsible for planning, forecasting, and treasury to improve business revenue. Automation ensures high levels of collaboration between different F&A domains and different departments, at large, and affects quick closures for real-time data analysis. Unified F&A automation platforms support the CFO objectives and business initiatives during maritime and geopolitical upheavals.
