According to a recent survey by FloQast, CFOs are much more familiar with the concept of “financial transformation” than accountants, with CFOs being over twice as likely to have a good understanding of what involves.
The advancement of technology naturally increases the complexity and amount of work. Finance departments need to know how to best adapt to these changes, a process referred to as financial transformation. FloQast defines it as, “Reshaping, rethinking, and modernising financial processes to empower companies to unleash employee potential, establish more efficient systems, create a better company culture, and make better business decisions.”
“CFOs and their teams are under immense pressure to transform financially, but we’ve found there’s often a lack of understanding about what exactly transformation means and how to achieve it,” commented Mike Whitmire, CEO and co-founder of FloQast, CPA.
With this, it’s important to make sure that all employees in the department are on the same page in the context of financial transformation.
“It’s a team effort that requires collaboration, awareness, and cohesiveness from all members of the team.
“But perhaps the biggest catalyst to this transformation comes from accountants themselves, who have the most intimate understanding of the record-to-report landscape and stand to be immensely valuable to CFO-driven transformation initiatives with the right resources,” Whitmire added.
What Did The Survey Cover?
As companies grow, the gap in understanding between CFOs and accountants also does, especially in larger or growing companies. This means that accountants need more training and resources to support them during financial changes and to help them make improvements in their respective departments.
The survey, conducted in collaboration with the University of Georgia Consumer Analytics Programme, involved 385 people from the accounting and finance spaces between April and May this year from the EMEA, North America, and ANZ regions.
After surveying how familiar accounting departments are with the changing finance world, with influences such as new tech, the found a few more interesting insights, covering aspects such as…
- Their ability to acknowledge how these changes impact the company they operate in
- Whether their idea of the change matches the realities of what is actually happening in the industry
- How ready they are to embrace AI as a new addition to the industry
Context Of The Survey Respondents
The survey found that the average amount of experience respondents had was about 11 years, with most of them working at their current company for about 8 years, indicating a sufficient amount of experience.
Only a third of the respondents were CFOs, and 84% of them had worked as an auditor at some point in their careers. Other titles included 50% verified internal auditors, 48% certified management accountants, 35% certified public accountants, 14% accountant managers, 13% standard accountants and Chief Accounting Officers, 11% accounting directors or managers, and 9% controllers.
Difficulties With Applying Changes In Businesses
Financial transformation includes automating processes and centralising data, which is straightforward. It also involves a deeper focus on applying intelligent information and integrating business applications.
42% of accountants and 39% of CFOs acknowledge the importance of financial transformation, and 2/3 of them report having a plan in this regard. The issue lies in companies creating quick-fix solutions instead of carefully planned strategies. This hurts the company as opportunities to use financial data to make informed and strategic business decisions are missed.
AI Readiness And Use For Increased Productivity
When it comes to AI, the survey findings show that 37% of CFOs and 30% of accountants believe that AI will significantly help with productivity in the company. Both groups acknowledge that AI has become an important aspect of financial transformation as it allows them to compete with industry standards.
The survey shows that 54% of accountants and 63% of CFOs are actively engaging in automation processes. The numbers aren’t necessarily unsatisfactory, but there is still a need for AI to be incorporated into their day-to-day operations.
“Disparate workflows that address narrowly defined needs won’t deliver transformation. The CFO’s role in this process is to collaborate with accounting teams to facilitate and add structure to all transformative efforts across the department.
“Transformation truly happens when the CFO empowers accountants to optimise cohesive financial transformation – not singular efforts they think will drive change,” said Razzak Jallow, CFO of FloQast.
How Is FloQast Helping Companies?
FloQast is aware that there are solutions that companies need, and in response have developed two new models specifically for the accounting industry to better assess financial transformation.
These are called the “Financial Transformation Framework”, which looks at four essential components that make a good transformation, and the “Financial Transformation Belief Model”, a method designed to dedicate time and focus to true transformation.