• 5 questions to consider before embarking on a finance and accounting transformation

5 questions to consider before embarking on a finance and accounting transformation

01 February 2021

The most important questions that finance and accounting leaders should be addressing during times of change — but don’t think to ask.

Dealing with transformation is a fact of life for all business units in an age of disruption. While periods of rapid change are challenging for any business unit, transformations can be particularly painful for finance and accounting departments, whose processes and information flows are intertwined with every aspect of the organisation.

Mergers and acquisitions tend to grab the most headlines, but the types of transformations that impact finance and accounting departments can take many forms. Some are caused by external forces, such as regulations that create new reporting requirements, or an economic downturn that leads to a restructure. Other times, internal changes such as finance team turnover or a company’s decision to expand into a new business line or geographic region can stimulate a need to update or streamline systems and technology.

Further insights from on ‘Rethinking the finance function of the future’ can be found below:

But finance transformations don’t have to be a source of pain. They can be opportunities to make your finance and accounting departments run more efficiently — if you know to ask the right questions.

Here are five questions you need to ask across your finance and accounting function to make sure you’re using periods of change to drive productivity.

1. Strategically, is now the best time to consider a finance and accounting transformation?

In short, yes. Too often the finance team’s contributions are viewed as being historic, with senior management using its reports as a way to track activity that happened in the past. As a result, finance can often be on the back foot when it comes to strategic discussions about the future of the organisation.
Undertaking a finance and accounting transformation presents an opportunity for finance to elevate its strategic profile. Finance can play a leading role in the decision-making process by using data analytics to tell the story of where the company should be headed and how various strategic options will affect the business’ financial performance. By providing insight alongside analytics, finance leaders can showcase the functions true value and demonstrate that it’s an essential part of any strategic discussion.

2. As a finance leader, should I be using this process to reimagine the role of the Finance function?

Of course. In times of stability, it’s easy to think that optimising your finance function’s technology and processes means making minor, incremental changes to the status quo every year. But when your organisation is going (or has gone) through significant change, it can’t be assumed that incremental changes will be sufficient to ensure that your function is serving the business’ current or future needs.

A transformation is an opportunity to reimagine the team’s role and become both data analysts and strategic partners to the rest of the business. You need to think critically about what size team and what types of reporting capabilities, processes and technology tools will be needed by the business once the transformation is complete.

As you think about modernising, remember that not all of the future functions need to be performed by your existing team; use this time to identify tasks that can be outsourced or automated. 

3. Are we, the finance function, ready to be a catalyst for change throughout the business?

In short – yes. Finance touches every part of a business, so the changes you make can’t, and shouldn’t, be considered in a vacuum. Whether or not you view yourself as the driver of change, the change made to the finance team will impact the rest of the business.

As an example, if your back-office adopts technology to automate the collection of invoices from suppliers, the business units that work with these suppliers on a daily basis need to be considered so they can make sure that the new system doesn’t disrupt the delivery of services. This dynamic goes both directions. Similarly, if a business unit decides to switch from a variable pricing model to a fixed-fee model with its suppliers, finance needs to be involved so that the invoicing system can be adapted to reflect this change.

4. Should finance be responsible for the transformation and its execution?

Successful finance transformations don’t happen by chance; they require careful planning and communication. Like any complex project, they need to be managed proactively. This applies to all parts of the business but especially finance, where the stakes are high and where mistakes can have a direct impact on the bottom line.

A change management plan should, at the very least, include the following:

  • A list of stakeholders affected by the change
  • The team in charge of the transition and a single point of contact
  • Detailed description of what the final, end solution should look like
  • A list of actions required to get from the current state to the end state
  • Timeline for each of the steps
  • Checkpoints along the timeline to monitor progress and adjust to any unexpected obstacles

Your advisors can add real value to the plan outlined above, but most importantly, in the identification of requirements, checkpoints and highlighting of challenges and pain points that your transformation might encounter.

5. How do I go about communicating the transformation plans to internal stakeholders and teams?

Not only will you need a plan to manage the transition, you’ll also need to think about how to communicate with stakeholders in the finance team and throughout the wider business.

A critical element your communication plan should be to clearly outline the business case for the project. Stakeholders might struggle to make a decision if they fail to see the rationale behind it. The communication plan should also address the following questions:

  • Who will be their main point of contact during the transformation?
  • When will various stages be completed?
  • How will various groups across the business be affected by the change?
  • How will we track success and measure progress toward that goal?

Importantly, your communication strategy shouldn’t be a one-way street. It makes sense to seek out and incorporate feedback from the stakeholder groups you’ve identified that will be affected.

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Our objective is to ensure you can confidently identify the right tools and processes to optimise your accounting and finance operations.

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