They should have a direct say in business management
Accounting professionals have the responsibility to maintain an enterprise’s financial health and hygiene. There is a growing demand for their deeper insight – and intervention to ensure greater business remains buoyant.
Traditional accounting is slowly phasing out from its custodial and book-keeping fixation. Finance professionals are moving away from shackles of its old mindset to a more comprehensive business finance management.
With the changing business landscape and the evolving phase of finance, the commercial aspect of enterprise accounting is undergoing significant changes crossing its conventional boundaries. The three most critical levers of business – project cost management, procurement and manpower have found an ally in finance and helping companies bring significant financial optimization and transparency.
The salient part of this transformation from accounting to finance is its 360-degree shift in its role and approach. The introduction of dashboards and analytics powered by state of the art enterprise technology systems is bringing transparency to support timely and appropriate decision making, data analysis to estimate and forecast.
Wider role
This has elevated finance’s role from a doorkeeper to that of a business partner. This is improving the finance function in building trust with the company to adopt it as a business enabler and reap the many benefits entails.
For instance, finance in project management can help businesses in anything from budgetary alignments to mitigating contractual commercial risks. These elements entail significant costs and if adopted diligently can create cost savings.
It must not be a gatekeeper to maintain book-keeping but ensure proper recognition of revenue, timely raising of invoices and tracking of timesheets to ensure higher productivity.
They got to move away from just efficient and appropriate maintenance of accounts to a helping hand for operations personnel in analysis of cost variations … as well as missed opportunities. They should be not be seen as controllers but enablers helping projects teams to realize higher profits.
Working for greater good
In the same way, the role of accountants in procurement is critical to contain costs and boost efficiency. These must not just co authorize purchase orders and invoice booking but to help analyze cost through benchmarks.
They can do this by analyzing the purchase patterns, optimize costs by improving lead and storage cycles as well as forecast as per business needs.
Workforce cost estimates in the contracting world is a significant cost driver. Here, finance needs to delve deeper into data to prepare advance analysis for manpower productivity benchmarks.
An analytical approach can help to monitor the overtime time and productivity. If these costs are managed effectively, a business can improvise its bottom-line by 100 to 150 basis points.
It is for both business & accounting professionals to ally and bolster business confidence for a robust outcome.