The CFO in 2018 is expected to be so much more than an average finance expert. It has come down to being a number’s expert, a generalist, a performance leader and a growth champion all at the same time. The public face of company performance, the CFO is on an alert every time the company ebbs towards financial losses. We do expect a lot from our CFOs and expectations are going to rise.
Cost Management, risk mitigation and cash flow management remain the core competencies.
In fact, the modern CFO is ever better in fulfilling these requirements. The CFO seldom gets recognized for auxiliary functions like ensuring regulatory compliance, managing investor relations and designing control systems. Financial performance often takes a downturn when the auxiliary functions are overlooked.In a survey conducted by McKinsey, a majority of CFOs responded that they see their role expanding to include more of non-financial demands. In fact, 88 percent of the 164 CFOs responded that CEOs expect them to be more active participants in shaping the strategy of their organizations. The following article highlights the importance of automating expense management for CFOs and outlines the essential design requirements of such a solution.
CFOs today are actively participating in organizational transformation and performance management. Digitizing critical business processes have become a priority for a majority of organizations and CFOs are playing an important role in the same.Among the critical processes, one of the often overlooked processes is expense management. Widely considered as a peripheral activity not closely associated with business, expense management has suffered even at the best of organizations. A number of incomplete solutions have been presented but they have fallen short of completely addressing the problem. In the same survey conducted by McKinsey-
Only 1 in 3 CFOs said that their organizations possess the necessary resources for digitization of their business activities.
CFOs need that they are able to dynamically allocate capital to various stakeholders in the organization. Only a software-based solution which requires minimal efforts to operate can provide the necessary infrastructure required for the same.
Automation of any business process inherently requires the proposed solution to be human-centric, transparent and swift.
Before we dive into the automated solution it would help us to shed some light on traditional expense management.We can characterize the traditional expense management of having three key attributes :
On the other hand, we might look into the defining attributes of an automated solution. Automated solutions for any process display these characteristics :
A successful automated expense management solution is highly likely to increase operational efficiency as opposed to lowering it. The only barrier to realizing such a stage can be an ineffective design of the proposed solution. We outline the few essential principles which leaders can use as a yardstick when deciding which solution to choose.
An expense management solution has to have minimal effort associated with its operation. The key tasks involved in expense management include expense tracking, reporting, filing, gathering approvals and transfers. The proposed solution has to provide for all the tasks and ensure that the tasks are easy to perform. A good way to tackle the problem would be to auto capture expense information from invoices or e-receipts and instantly report them into the database of such information. Managers should be able to approve the expense reported right from their workbench without having to interact with the user.
Software solutions are obligated to be inter-operable in order to succeed and become a widely accepted solution to a business problem. Interoperability dictates that the solution should be able to run effectively on multiple platforms and provide higher utility. A good expense management solution would require high degrees of interoperability with a number of internal systems. It should be able to integrate seamlessly with existing accounting and human resource management software. Mobile friendliness is a prerequisite for such a system, the lack of which will render the system obsolete in our present world.
Every industry has its traditional expenses, and every organization within the industry has a set of unique expenses. So it doesn’t make sense if an automated solution does not take into account the uniqueness of organizations. The need for compliance to cost control measures coupled with the uniqueness of organizations requires the solution to be capable of implementing custom policies. Once the appropriate control systems are in place, controllers and managers can turn to the more essential aspects of their job.
The solution would be deemed useless if it is incapable of delivering insights into the expenditures incurred. Analytics form the last leg of the feedback loop and are an indispensable aspect of all operations. Traditionally, expense management relies heavily on paper this makes it physically impossible to provide complete visibility of business expenses. The costs associated with identifying patterns in such a clustered database is likely to demoralize leaders from venturing into this path.A detailed insight into the expenses will provide an understanding of operational costs, and will also differentiate between the profitable deals and the not so profitable ones.Companies need to have a detailed analytics report into their expenses if they are to have an edge in the fiercely competitive market today. As we witness a paradigm shift from a mobile first to an AI first world, leaders need to ensure that they receive the best of both worlds, mobile and AI. An intelligent system capable of capturing relevant information, empowered by an intuitive user interface which requires minimal training is the need of the hour. One such solution is Fyle's expense management software.If you would like to witness Fyle in action, tracking and reporting expenses, then you can request a demo with us.