Become a TechRadar Insider
Working in finance is a numbers game. And numbers are often synonymous with accuracy. But it’s well understood that accuracy, when it comes to preparing for the future, is near impossible.
But that can be a hard pill to swallow for people who live in the numbers, leaving many chasing perfection in every aspect of the job.
CFO at Soldo.
The outcome is more often than not counterproductive. Rather than focusing on value-driven work, finance teams can get easily drawn into a time-consuming cycle of reflecting on and justifying historical data, which creates little more than a false sense of control.
Article continues belowIn fact, data shows us that 50% of finance leaders take more than six business days to close their books.
In a volatile economic environment, businesses need faster financial planning cycles to be more agile in the face of uncertainty. For that, the finance function needs a mindset shift.
Striving for right, not perfect
Finance teams’ focus on perfectionism likely stems from constraints imposed by legacy systems. Hours spent trawling through Excel deliver very little strategic value, yet are often justified by these systems and internal expectations of finance teams.
However, this backwards-looking approach often raises questions around accuracy. Data from previous quarters, filtered through legacy systems with built-in delays, is rarely fit for purpose when you’re dealing with economic volatility and inflation and trying to make timely, well-informed decisions on business spend.
The focus should be on getting things as close to ‘right’ as possible, efficiently, rather than chasing perfection. Adopting tools that enable faster reporting and budgeting cycles can help, allowing organizations to stay agile while freeing up valuable time for finance teams to focus on forward-looking strategy and decision-making.
AI deems perfectionism unnecessary
The good news for finance teams is that AI is rapidly rendering manual data consolidation, static planning, and report polishing redundant.
So many of the processes associated with reporting and forecasting perfectionism, such as identifying patterns, checking attention to detail, and detecting inconsistencies in reports, can be automated.
Yet, for many finance leaders, this remains an untapped opportunity. Almost 80% report that their teams are still operating on outdated tools and technologies, creating friction and slowing progress. Part of the reason may be that finance teams are often cautious about adopting AI tools.
They’re responsible for both internal and often external finances, so, understandably, there’s a concern about losing control. In reality, though, AI can give them far more real-time visibility and oversight than any legacy tool or system ever could.
Beyond streamlining reporting, AI is pivotal in enabling real-time, insight-led decision-making. It supports a more forward-looking, precise approach to planning by combining live data with predictive analytics to anticipate external economic shifts and better align internal budgets.
Simply knowing that AI support is there can also help ease that long-ingrained perfectionist mindset and the time it tends to drain from these processes.
For finance leaders in particular, it’s a clear sign that it’s time to champion investment in tools that are truly fit for purpose and able to keep pace with the speed and complexity of modern business.
Lifting cultural barriers
For the rest of the C-suite, it may feel appropriate (and less disruptive) to keep CFOs and finance teams solely focused on reporting and number-crunching, all of which are crucial to keep businesses running.
But that approach misses a big opportunity. CFOs are right at the heart of the organization, with a uniquely objective, cross-functional view of how money moves through the business.
The challenge CFOs should now be tasked with is integrating data, interrogating underlying assumptions, and enabling sharper, more informed decision-making. This is at the core of a ‘progressive finance’ mindset, where finance teams operate at the intersection of people, data and technology.
The most effective CFOs will be empowered to let go of perfectionism and achieving a false sense of control, and act as connectors across their business. They’ll partner closely with the CEO to provide insights that drive strategic growth, and work cross-functionally to align investment priorities, digital capabilities and business outcomes.
For this shift to take hold, the wider C-suite must actively support the evolving role of the CFO by recognizing their strategic vantage point, lifting information silos, freeing up budget for modern tools to enable it, and embracing a ‘right, not perfect’ approach to financial planning and reporting.
Shifting sights from the rearview mirror to the horizon
Letting go of the perfectionism mindset will liberate CFOs to focus on what matters most. It builds the capacity to partner cross-functionally and shape strategic priorities, giving finance leaders the well-founded influence to support the determination of the business's direction.
Businesses now need to recognize and empower finance teams as drivers of change, enabling more agile, responsive decision-making around investment and spend rather than confining finance to retrospective reporting. In doing so, they’ll reposition finance from a number-crunching function to a catalyst for sustainable growth.
We've featured the best expense tracker app.
This article was produced as part of TechRadar Pro Perspectives, our channel to feature the best and brightest minds in the technology industry today.
The views expressed here are those of the author and are not necessarily those of TechRadarPro or Future plc. If you are interested in contributing find out more here: https://www.techradar.com/pro/perspectives-how-to-submit