Empowering decisionmakers with real-time financial insights

In recent years, the risk landscape has evolved significantly for South African businesses. They now face a multitude of cybersecurity threats, such as increasingly sophisticated phishing, ransomware and malware.

Additional challenges include supply chain disruptions, evolving regulations and heightened emphasis on compliance and reporting. The latter is not helped by siloed financial data which typically results in greater inefficiencies, inaccurate financial reporting and heightened security and compliance risks.

Data may be the new oil, but it comes with its own unique set of challenges and risks. Manual processes to work with financial data and data transfers, for example, are particularly risky with breaches quickly leading to reputational damage, legal liabilities and financial losses.

The cost of financial data breaches is growing. According to Cisco’s Security Outcomes Report, volume 3, nearly two-thirds of organisations experience major security incidents that jeopardise business operations. 

To mitigate these risks, businesses are putting more effective and comprehensive access controls in place, automating processes and making significant financial investments in cybersecurity.

A 2023 Digital Business study by Foundry revealed that 40% of business leaders said improving security is a top strategic objective in their organisation. Among the new measures companies are implementing are cloud-native applications and personalised dashboards to monitor financial data and create more accurate, real-time data.

One of the benefits of these cloud-based applications are the more granular controls they provide in terms of access and detailed logs to track those with access to the data. 

Digital technologies have huge benefits for both the financial reporting function and business processes. They also free up companies to invest more time and resources to drive innovation, provide a better customer experience and, critically, ensure more accuracy in reporting. 

A recently released report from Sage revealed that digital transformation is no longer solely the responsibility of the chief information officer (CIO), but has expanded to include the CEO and CFO.

In fact, 90% of financial decisionmakers are playing a role in their organisation’s strategy. 

Businesses that are using digital technologies say they are finding it easier to manage remote workforces and keep abreast of increasingly onerous compliance regulations, while automation is helping them to drive efficiencies.

Sage’s “CFO 3.0: Digital transformation beyond financial management” report, which surveyed more than 300 senior financial decisionmakers on the role of automation in compliance and reporting, revealed that the majority of businesses have adopted some kind of emerging technologies, with nearly half of respondents reporting they have experienced stronger business performance as a result. 

Far from regarding artificial intelligence (AI) as a threat, business leaders, including senior financial decision makers, report that automating routine tasks is freeing them up to focus on more important work including providing them with the time and opportunity for creative and strategic thinking; more room for critical analysis and innovation; more accurate forecasting, planning and efficiency; and enhanced data governance.

Gerhard Hartman, vice-president of medium business at Sage SA & Middle East, reveals that many of the businesses that have adopted a more progressive approach to digital transformation are also putting strategies in place to improve financial reporting. 

“Faced with more data than ever before, the challenge for most businesses — including their finance departments — is the time required to analyse that data,” he says.

“More and more businesses are therefore turning to artificial intelligence and machine learning to identify trends and patterns in the data and to reduce the time spent on simple and repetitive tasks.

“At the same time they’re using robotic process automation to drive efficiencies and support real-time financial reporting and compliance.” 

Hartman says that as the productivity benefits of new technologies become more apparent, financial decisionmakers are becoming more confident about using them.

“The big advantage of these technologies is the ability to make real-time decisions about risks and opportunities.

“There is no question that automated compliance reporting minimises the risk of human error, reduces costs over the long term, streamlines the data analytics and data collections process, and ultimately reduces overall compliance risk.” 

Sage’s research reveals that most large businesses are using financial management technology to automate and improve their compliance reporting, with more than half reporting that automation has had a positive impact on their business and efficiency levels. 

Hartman says businesses should not be afraid of investigating the opportunities that digital technologies offer.

“Don’t allow the idea of digital technologies to become overwhelming. Even if there are aspects of the concept that sound overly complex or ambitious, it is possible to start more simply with a financial management system to oversee and manage day-to-day transactions and then to gear up to more complex systems as you become more familiar and comfortable with the technology.” 

Most business management solutions these days, he adds, are cloud based, which has the advantage of providing organisations with more flexibility around data storage. It also means that even remote workers can access the information if they have the authority to do so.

Another advantage is the ability to streamline the process of generating invoices and handling payments more efficiently. 

One of the biggest challenges for businesses traditionally — and the finance function in particular — has been the ability to provide accurate and effective financial reporting.

The growing suite of technology products now available is addressing this challenge, says Hartman.

“In addition to ensuring improved financial reporting, these tech products are also making it possible for businesses to improve both the customer and the employee experience.” 

Sage’s research found that 40% of finance leaders believe that AI and machine learning will improve forecasting and financial planning, while 59% expect emerging technology to audit results continuously and to automate period-end reporting and corporate audits. 

The three core technologies driving productivity in finance, according to the research, are data analytics, cloud-based accounting platforms and compliance automation solutions.

Cloud computing is perceived as critical to helping businesses create more agile and cost-effective in-house finance functions; implement financial management technology; and uncover efficiencies and optimised operations. 

“The finance function in most businesses is increasingly regarded as the ultimate custodian of data, cybersecurity and data privacy,” says Hartman.

“Their priority is to decrease risk to the business, enable real-time decision-making and build a finance department within the business that can withstand future challenges.”

Choosing the right technology products that will provide the business with the necessary competitive advantage, however, is critical, he says, adding that key to making the right decisions is to find the right technology partner who will spend time understanding the unique needs of the business and the nuances of the sector in which it operates. 

For more information on cloud finance solutions, visit Sage Intacct here or book a free 30-minute demo to see Sage’s cloud finance solution, Sage Intacct, live in action here.

This article was sponsored by Sage.