64 percent of executives believe that finance departments should focus more on analyzing financial data to make recommendations about the organization’s business model and strategy.
This is according to a recent study conducted by Harvard Business Review Analytic Services in collaboration with Payhawk. 89 percent of executives surveyed note that finance teams can provide a unique and valuable perspective on the organization’s business challenges. 76 percent say finance departments play an important role in supporting their organization’s current business goals. 67 percent of managers believe their finance teams still spend most of their time reviewing and posting invoices and expenses.
Maximum contribution to the organization
To maximize contribution to the organization, finance teams should use more automation, the research shows. Finance professionals are still too often burdened with recurring administrative tasks, and as a result there is no time to strategically carry out their tasks or to quickly provide financial information with which they can advise the management of the organization to achieve the goals.
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In the current environment of geopolitical uncertainty, rising inflation and supply issues, finance teams are expected to make a more strategic contribution. According to the survey of 227 executives, 89 percent of organizational finance professionals said they offer perspective on the challenges facing their organization. And 83 percent said business risks arise if the finance department does not contribute to an organization’s strategy.
Economics still focused on ‘normal’ work
Despite this, finance departments are still mainly focused on ‘normal’ activities such as keeping records and communicating with debtors about non-payment. When asked, 64 percent of boards believed that finance teams could provide more advice on the business model and strategy. “To achieve maximum impact, finance departments still need to take big steps to automate number crunching,” said Hristo Borisov, co-founder and CEO of Payhawk. “This would free them from repetitive administrative tasks and allow them to play a more strategic role in their organization.”
Develop stronger relationships with other departments
With automation, finance teams can excel. The Harvard Business Review Analytic Services report shows that finance professionals with a high degree of automation are much more likely to be seen as strategic partners to management.
“Automating financial administration is a way for companies to excel. It is something you have to prioritize in order to be successful,” says Borisov.
Download the report here.
For finance teams to function more strategically, according to survey respondents, they also need to collaborate more and develop stronger relationships with other departments. Most said their finance team worked together, but 36 percent said they actually still work in isolation. “The survey indicates that finance teams themselves have a desire to collaborate more, but they should focus on the quality of collaboration, not just on the quantity,” says Borisov.
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