Tough Times Ahead? How Finance Automation (and Talent) Can Help CFOs
24-02-2023 4 min read
A new year is usually a time for celebration, but as we enter 2023, the outlook appears quite challenging. The IMF recently declared that 2023 will be “tougher than the year we leave behind”, with a slowdown in global economic growth widely expected to trigger a recession in a third of the global economy. Business consultancy EY thinks the UK’s recession could be twice as bad as they previously thought. And while some of the gloom has lifted in the US, a downturn still appears likely.
The reasons for this pessimism are well documented. As the world emerges from the pandemic, inflation has soared, exacerbated by the war in Ukraine, geopolitical tensions, and supply chain disruptions. With the economic backdrop more complex and demanding than the 2008 global financial crisis, successfully navigating the economic uncertainty ahead will be tough for CFOs.
So, what’s the solution? For many companies, part of the answer lies in embracing technology and drive finance automation.
CFOs and the Digital Finance Function
Technology is crucial to unlocking value. To survive the impending economic uncertainties and thrive on the other side, continued investment in technology – particularly throughout the full cycle of the finance function – is crucial. And CFOs play a vital role in the digital transformation of the finance function.
However, according to a Gartner report, less than one-third of CFOs are confident that their technologies are aligned with their requirements for ensuring future business success. So how can you accelerate digitalization of the finance function and accelerate the finance automation for their business?
Hyperautomate Finance Processes
Our daily lives are filled with repetitive tasks. The finance function is no exception. Mundane and labor-intensive tasks such as inputting invoices and logging payment transactions are ripe for finance automation.
Artificial intelligence (AI) and robotic process automation (RPA) are transforming the finance function through hyperautomation. By automating and streamlining repetitive, high-volume, and manual business processes, AI and RPA create efficiencies, avoid costly mistakes – and do so much more.
Hyperautomation can provide valuable insights, such as how to collect money faster. And it frees up your team’s time to focus on the strategic decisions that will drive growth and innovation. Both help drive a company through turbulent economic conditions.
Artificial Intelligence: The Key to 360˚ Cash Visibility
Everyone is talking about the implications of AI and the impact it will have on jobs and the way we work. In treasury and the finance function, the impact will be equally profound. But rather than seeing AI as a threat, CFOs should see it as an opportunity.
We’ve already talked about the complicated global economic environment. In these challenging operating conditions, real-time visibility over working capital and financial data will be key to survival and growth. Greater insight and more accurate forecasts will allow you to be nimbler and to make the right decisions earlier.
In reality however, many businesses still lack real-time insights. Too many CFOs still draw their balances from bank statements, and monthly, quarterly, or annual figures, before consolidating data manually in spreadsheets (which struggle to manage large data volumes). Not only is this time-consuming but it is not conducive to identifying potential risks or calculating accurate forecasts in real time. Here is where you can use AI as part of an overall finance automation strategy to your advantage.
By analyzing data from multiple systems in near real time, AI provides a clear 360˚ picture of current and future cash balances and flows. With this data, you can anticipate potential cash flow concerns. You can also identify trends with speed and accuracy, helping you make better-informed strategic investments and decisions. Data is a key part of your job – implementing technology solutions such as AI should feel like a natural progression.
Tapping the Talent Pool
The digital transformation of the finance function is a top priority for CFOs right now. But in order to embrace the opportunities that the finance automation revolution promises, the right people with the right skills need to be on board. People are key. Unfortunately, finance is facing a talent crunch — CFOs cite hiring and retaining staff as the most difficult task they face over the next 12 months.
Since most of the world has emerged from the pandemic, two – seemingly conflicting – workplace stories have emerged.
The Great Resignation that began in 2021 continued apace in 2022, and was exacerbated by ‘quiet quitting’, where employees do just enough to not get fired. Both have had a huge impact on companies’ productivity. More recently, we’ve heard that Alphabet, Google’s parent company, is cutting 12,000 jobs, Microsoft 10,000 jobs and Spotify 6% of its workforce. This on top of more than 193,000 layoffs at tech firms globally since 2022, according to Layoffs.fyi.
Both of these trends might make you think that there is a glut of tech talent in the marketplace. However, the post-pandemic labor market has been challenging for companies.
Finding the right talent, i.e. people with the necessary digital skills, and retaining staff is one of the top challenges for CFOs in the year ahead. To successfully navigate the recruitment challenge, CFOs will need to rethink their recruitment efforts to ensure that the critical positions are prioritized. They will also need to identify and upskill in-house talent.
But how do you prevent quiet quitting and boost morale? How do you turn quiet quitting into quiet hiring? By using AI and RPA to take on the repetitive and time-consuming processes. Automating the humdrum will give staff time to focus on more stimulating work, be part of the strategic decision-making process, and become true value creators. It will also allow you to deploy your staff to where you need them most.
Preparing for the Unexpected
CFOs face a multitude of risks as we enter 2023. Successfully incorporating new technology such as AI and RPA within the finance function will be critical to identifying and mitigating these risks and to driving growth. However, without the right digital skills within the finance function, it will be impossible to achieve these growth goals. Talent and technology are at the center of this growth story.
Fortunately, many CFOs are getting the message. According to a Gartner survey of CEOs and CFOs conducted in 2022, talent and technology are being prioritized over investments in mergers and acquisitions.
We are happy to help you
Curious how Serrala can help you? Don't wait any longer, contact us today.