What is a Financial Digital Transformation?
Financial Digital Transformation is a review of the current financial systems and processes in place to improve Management Information (MI), find duplications, eliminate manual processes, and improve controls.
Systems need to be designed to produce insights that adapt to changing environments, particularly now when the economy seems so uncertain.
By modernising the finance function, you can achieve operational efficiencies that utilise the data and technology available, providing tailored insights that ultimately result in better business decisions.
Why is Financial Digital Transformation important
There are many benefits to going through a review but there are three main areas that are likely to resonate:
Improved business insights
To make better business decisions, you need to be able to report on the information that is key to your business. You may be producing management information (MI) already, but this does not mean that reporting is aligned with your business goals and strategy. It is also key to make sure those insights are tailored to the individuals in the business, and these are likely very different for each person depending on their role.
Improved governance
A lot of business systems and processes will be set up in a particular way because "that is the way it has always been done". However, this does not mean the controls in place are as secure as they could be and there will likely be areas that can be improved upon to prevent fraud or internal issues.
Improved efficiencies
There may be manual processes in your current business systems or there could be senior, higher-salaried employees doing transactional processes that could be automated. If current systems are also not integrated this could be causing duplications and slowing processes down.
What are some examples of this?
There are many different areas that could apply and benefit your business but here are a few:
- There are thousands of different trade-specific add-ons that can link to accounting software, such as Xero, and having these in place can streamline back-office data and create powerful insights around customer interactions/behaviours.
- Automating transactional processes can free up the time of senior team members – allowing them to spend time on areas where their insight and experience are adding value.
- Providing insights that link to business strategy can help build momentum and drive the business toward meeting its goals.
- Reporting that is tailored to individuals/departments can be invaluable as it can bring teams together to work towards common goals, however as a business owner you only want to share certain areas and so having reporting templates set up that can be run at a click of a button is invaluable. Reports can also be tailored to provide board packs, bank reports, etc. The hard work has gone into getting the data, the report output should be a simple process at the period end.
Alicia Williams
Alicia is Director of the Genus team at Shorts, a chartered certified accountant and Xero specialist.
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