In order to succeed in the existing corporate scenario, businesses must collaborate with finance personnel with regard to management accountants. Their capabilities must be leveraged to make informed decisions and enhance performance.
In several MNCs, the financial activity has been restructured to facilitate process improvement. This would enable finance personnel to extend support to business stakeholders and allow budget managers to take ownership of accounting functions.
According to Peter Simons ACMA, CGMA, technical specialist, research & development, at CIMA, “Management accountants have the right skills and a hard work ethic, but they are often so busy with the reporting cycle that they don’t have the capacity to provide the support the business needs”.
However, is the change feasible and would it be possible for organizations to be content with the state of affairs related to budgeting and forecasting?
The findings of a survey by Advanced Business Solutions (Advanced), which evaluated current business/forecasting systems are as follows:
- The dependence on spreadsheets is relatively high; around 88% of those questioned are not using cloud-based systems, while 36% favored using spreadsheets.
- Mitigating the effect on human resource time was a critical issue for over 60% of those surveyed.
Real-time data reporting is also a requirement.
- Nearly 50% of the respondents informed that budget finalization is a tedious process.
The performance of finance function can be determined by three keywords: efficiency, influence, and information. System standardization, process enhancement, and collaboration among people in shared service centers have augmented effectiveness.
If accountants have to tap the firm’s data effectively and use the assessment to have more impact, a possible strategy would be to move from a traditional spreadsheet-based strategy and adopt stringent budget management. In this way, the pressure on the finance personnel could be decreased, effectiveness could be enhanced and financial outcomes could be bolstered.
Spreadsheets would be a vital aspect of the accountant’s toolkit in the near future, but firms are looking at alternate methods as well. Finance stakeholders are considering options that could change the financial activity – from creating management accounts to managing budgets.
Firms which depend on spreadsheets for the budgeting process have implemented systems to facilitate transformation. Based on the modified system, firms can establish management accounts for operations. In order to establish the new system, efficient change management is critical.
Some of the benefits are as follows:
- The capability to report on current data expeditiously.
- Decrease in the time required to create management accounts.
- Manage data consolidation efficiently.
- Ensure operational personnel have control over revenue and cost.
- Opportunity to evaluate and report on data across the organizational hierarchy.
- Streamlined business operations process.
Transferring information from a system to the spreadsheet consists of probable risks. Therefore, businesses may have to deal with reporting errors. The scope for cooperation and business change due to automation is evident, but finance stakeholders are hesitating to adopt modified technical solutions.
Finance experts are encouraging firms to look at the next generation of finance personnel. Firms must adopt automation to improve efficiency.
Amalgamation and automation can link budgeting and forecasting. As businesses internationally take a holistic approach towards business, accounting professional must ensure they have a greater influence on decision making.
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