Working in a finance team today means going beyond accounting and controls. It means using technology and data, and collaborating with other departments, to play an increasingly integral role in shaping business strategy.
Finance Managers are having to think more strategically about the business as a whole, and this trend was reflected in the results of an American Express survey of 250 senior financial decision-makers [1].
While 92% of financial leaders feel confident about the prospects of their business, most recognise the need to protect their company from economic uncertainty, such as inflation and rising prices, labour and talent shortages.
Here’s a closer look at the top priorities for the finance function:
1. Helping the business reduce costs
For as many as 40% of finance leaders, trimming costs is the top priority for their business, as inflation and rising prices, particularly energy and raw materials, puts increasing pressure on margins [1].
Costs must be lowered by improving efficiency and eliminating waste across the business. For about a third of finance leaders, streamlining operations is the biggest business opportunity. About 38% are actively reducing operating costs, for example, labour, raw materials, advertising and marketing, to improve competitiveness.
About a quarter of finance leaders also believe greater efficiency is the most effective way to improve the finance function itself so that it can do more with less and support more people within the company. For example, through the provision of wider insights that can help multiple teams in planning ahead and setting targets.
Key to this is greater visibility over expenses and investments so that finance teams can more easily identify where savings can be made. The American Express® Corporate Purchasing Card helps finance teams to centralise expenditure, allowing you to set parameters for where and how cards are used and how much can be spent, with automated transaction information and data analysis1.
2. Investing in new technology & automation
Technology can enable you to automate manual and time-intensive tasks and concentrate on higher-value work such as cost-reduction or investment strategies instead. For over a third (36%) of finance leaders, adopting new technology and increasing automation is a top priority [1].
Software can support a range of tasks for finance teams, from creating, sending and tracking invoices and payments, to automating payroll, calculating tax obligations and managing expenses. Not only can this significantly boost efficiency and productivity, but it also reduces errors and potential delays, such as late invoice payments.
And 31% of finance leaders consider digitisation and becoming more technology-focused as one of the biggest areas of opportunity for their business. Already, about 30% say the wider business is boosting its competitiveness by automating more processes and introducing new technologies.
For the finance function itself, 80% of financial leaders say automation and new technology are already helping to reduce their administrative burden. The increasingly sophisticated automation of Enterprise Resource Planning (ERP) software can execute and bring together data on transactions across the whole business, while the latest Enterprise Performance Management (EPM) systems use analytical tools and artificial intelligence to identify trends in the data [2].
The American Express® Corporate Purchasing Account can be easily integrated into your existing Enterprise Resource Planning software without disrupting your Accounts Payable process. This means you can more efficiently manage payments to your suppliers via a single web portal2.
3. Improving access to quality data and insights
Deriving meaningful and actionable insights from large quantities of data is a challenge shared by the majority of finance leaders. As many as 83% say they need access to better quality data to support the running of their teams and about a third (35%) say improved data quality or insights is the most helpful way to improve the running of the finance function [1].
Access to higher quality data also supports finance teams in achieving their top priority of cost reductions. Armed with greater transparency over expenditure, as well as more granularity on where the most and least profitable parts of the business are, finance teams are better equipped to make recommendations on potential savings.
Extracting useful insights from data requires finance teams to develop a new set of skills. This is recognised by over half of the survey respondents, who consider data analytics and technology skills as becoming more important over the coming years.
Spend analysis is a valuable feature of the American Express Corporate Purchasing Account. With American Express® vPayment, you can access detailed information on expenditures, giving you real-time visibility on where expenses are being incurred.
4. Improving forecasting
The global pandemic forced many companies to make quick decisions and fast adaptations almost overnight, whether that was to support employees in the sudden shift to remote, online working or to adapt marketing and product lines to appeal to consumers who were spending more time at home.
These events re-emphasised the importance of forecasting for business resilience. Without clear visibility on the company’s cash position, including how much is in reserve to survive tougher periods, a business is vulnerable to external events. For as many as 85% of finance leaders, accurate forecasting is now crucial to their success [1].
This has prompted many finance teams to revise their forecasts and budgets more often, allowing plenty of time to make adjustments to spending plans if needed. While most revise budgets quarterly, a third now plan to update budgets as often as every month and one in ten expect to do these even more regularly in the future.
A challenge for finance teams will be managing this increase in forecasting, given 38% of financial decision-makers cite forecasting as the most time-consuming task in their team. By prioritising the adoption of technology and automation, teams can potentially be relieved from some of this additional burden.
5. Restructuring & upskilling
Developing the skills required to fully leverage the potential that technology can bring to an organisation, will be key to the modern finance team. Over half of financial decision-makers say they are planning to increase headcount in the next two to five years, with 56% citing data analytics and skills as becoming more important [1].
As well as hiring, a top priority for 84% is upskilling their team. For about a third, equipping team members with digital skills is the most helpful way to improve the running of the finance function. For another 31%, it’s faster decision-making, which is an area that can be supported by technology and improved digital skills within the team.
At the same time, the role of finance within the company is also becoming more collaborative. While most finance leaders say the relationship of their team within the wider business is good, over three-quarters (79%) say their team needs to service a greater number of internal stakeholders than before.
To do this, finance teams will need to start working more closely with other business departments, to better understand their financial requirements. In doing so, they can more effectively assign budgets and make recommendations. For 29% of finance leaders, improving how closely their team works with the wider business is a top priority.
Being agile and flexible is important for 81% of finance leaders. By supporting business leaders in making better decisions, finance teams can significantly increase the value they bring to their business, becoming strategic partners that are pivotal in shaping strategy and growth. As the finance function evolves, embracing technology and data-driven insights will be crucial for driving innovation and maintaining a competitive edge in a rapidly changing business landscape.
- The maximum amount of time for deferred payment on purchases is 44 calendar days and is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date. The statement period may vary by each calendar month.
- Paper invoices are still needed for VAT reclaim unless the Supplier is enabled to provide tax-compliant line item detail and VAT information.
[1] Amex UK, Data, Digitisation, and Dynamism are Defining the CFO Role, 2023
[2] SystemsAccountants, EPM and ERP Compared, 2022