Setting the foundation
The accounting and finance function has traditionally focused on back-office work such as month-end closing and reconciliation, accounts payable and accounts receivable, and compliance. However, many businesses have trouble completing these tasks in a timely fashion or on recurring basis due to a lack of in-house resources and expertise.
This results in poor financial visibility and a lack of financial insight, leading to surprise losses or setbacks, financial bottlenecks, and costly missteps. Business growth stalls because finance and accounting is reacting instead of actively shaping the company’s future along with other leaders.
Most businesses in Canada fall into one of four levels when it comes to their finance and accounting function.
Level 1
Ad-Hoc: No close process- The business has no reliable financial data
- There is a high risk of non-compliance
- Business decisions are made without visibility
Level 2
Reactive: Incomplete or late close- Reports are delayed or error-prone
- There is limited value in reports for management
- Confidence in the numbers is low
Level 3
Reliable: Timely and accurate close with analysis- Reports offer clear financial visibility
- Financials support data-driven decisions
- Reports enable KPI tracking and variance review
Level 4
Operational: Level 3 plus insights, forecasting, and finance/executives are in sync- Finance drives planning and growth for the business
- Finance offers regular forecasting and scenario planning
- Finance is aligned with leadership decisions
Where does your business stand? With strained resources and expertise, traditional finance and accounting teams can’t move into a value-driven function because they lack the financial visibility and strategic insight that comes with forward-looking financial planning.
Typically, there are three key areas where businesses struggle to modernize their finance and accounting functions:
- Technology—Many businesses still complete finance and accounting tasks in spreadsheet programs like Excel instead of using cloud-based financial operations systems that provide more functionality, flexibility, and insight.
- Policy and procedures—Businesses often lack consistent processes around month-end reporting and reconciliation, cash-flow management, working capital optimization, and other workflows, resulting in unreliable or incomplete financials.
- People—A lack of expertise in specific areas of finance and accounting, such as financial reporting or financing options, can be a detriment for businesses trying to take a more strategic and forward-looking approach.
In a value-driven finance and accounting team, however, these issues are resolved with a strategic plan that includes automated accounting software, consistent processes, and highly experienced personnel.
Focused on the future
A value-driven finance and accounting team goes beyond the traditional tasks of reconciliation and compliance. Instead, it actively contributes to the strategic success of the business. The team focuses on creating, protecting, and enabling value in the future while also identifying and assessing risks. In addition to completing the day-to-day tasks, value-driven finance and accounting teams enable the business to adapt and make changes to thrive no matter what the market has in store.
For example, with the uncertainty around tariffs, a value-driven finance and accounting team determines how the tariffs will impact the business one, two, or three years down the line, and develops strategies to ensure the company’s success. This kind of team isn’t reactionary. Instead, it is highly proactive and insightful.
Value-driven finance and accounting teams offer businesses three key advantages:
- Accurate, timely, and decision-ready data
If the books are messy and reporting is delayed, business leaders simply can’t trust their numbers or make decisions using those numbers. This lack of visibility leads to missed opportunities and risky decision-making. A value-driven finance and accounting function delivers accurate and timely data so leaders can confidently make data-driven decisions.
- Optimized resources
Many businesses operate with limited resources—whether it’s personnel, time, or technology. As the company grows, the finance and accounting function often struggles to keep pace with increasing complexity. By staying organized, leveraging automation, and focusing on efficiency, businesses can maximize their existing resources. With the right systems and processes in place, finance teams can do more with less—delivering greater insight, control, and value without expanding the budget.
- Strategic insight based on real-time information
When financial reporting lags behind the company’s needs, there is minimal forecasting, scenario planning, capital expenditure planning, budgeting, or collaboration between departments. A value-driven finance and accounting function shifts the focus from a back-office cost centre to a forward-looking partner, enabling leaders to act on the available data. With real-time reporting, automation, and KPI-driven dashboards tailored to the business model, leaders can have an abundance of strategic financial insight at their fingertips.
Strengthening your finance and accounting function
If your business is struggling to manage the back-office functions but has a goal of developing a value-driven finance and accounting team, there are six key steps on this journey.
- Accounting catch-up—Create a plan to get up to date with current reporting and compliance obligations, and add the resources needed to get caught up to a baseline starting point.
- Real-time financial reporting—Develop timely and accurate financial statements on a recurring basis plus measure and track the key performance indicators that drive your business’s success.
- Apply automation—Assess existing workflows and develop automation strategies to eliminate inefficiencies, improve accuracy, and enhance scalability.
- Future reporting—Include future financial insights. Have a budget in place and reforecast throughout the year based on market and operational changes.
- Inter-departmental collaboration—Work with leaders across the business in different departments and establish clear communication channels to share key information.
- Creating value—Start delivering real value by offering strategic insights that inform business decisions such as investments, expansion, and pricing.
The bottom line
Building a value-driven finance and accounting function will help your organization to look forwards instead of backwards. Doing so will help your business focus on the future, enabling it to become more competitive and successful.
How we can help
Moving your finance and accounting function from a transactional and reactive cost-centre to a data-driven strategic enabler can seem overwhelming. However, with the right resources on your side, your business can see intrinsic value from your finance and accounting function very quickly. We provide organizations with high-level financial and operational support to help them optimize their financial processes and decision-making. Contact one of our Finance & Operations team members to learn how we can help your business.