How virtual finance operations are changing financial processes?
Digital disruption in financial services over the last few years has significantly transformed the way finance operations were done earlier. The modern-day finance functions are largely being driven by experiments with new technologies such as cloud-based ERP systems. Such technologies enhance visibility, efficiency and speed with greater control over ROI. The last few months disrupted by COVID-19 have seen economic, fiscal and workforce impacts on the finance function.
According to McKinsey, chief financial offers (CFOs) who are at the heart of managing all financial aspects are still at one remove from the center of digital transformation efforts. Many c-suite level executives want CFOs and the finance function to provide real-time, data-enabled decision support. Today’s CFOs are responsible for not only finance functions but also digital initiatives. They should consider multiple applications of digital technologies to perform finance tasks.
In its survey, McKinsey found that CFOs themselves want to spend more time on digital initiatives. However, many are unsure where to start. This is largely considerable owing to the rapid evolution of innovative technologies and the large gap of top technology talent. CFOs should commence on to experiment with technologies for digital transformation, otherwise, they might miss a golden opportunity to drive the business agenda. They can turn conventional finance functions into a completely virtual finance operation through a well-thought-out solution as well as a systematic implementation plan and transformation framework.
Digitization has always been a vital goal for the finance function as technological advances are happening at a rapid pace. CFOs with their team can play a strategic role in supporting their organizations even in an uncertain situation. The current digital advances have enabled CFOs to perform their responsibilities by breaking the norm of being sited in a cabin, bringing the concept of virtual CFO. Unlike traditional CFOs, a virtual CFO handles all the duties of CFOs by working remotely and virtually. This virtual approach in a CFO’s roles can connect the CFO and finance team to work anytime and anywhere.
Road to Virtual Finance Operations Model
The concept of virtual finance addresses customers’ needs digitally. This finance function is extending beyond conventional financial services. Digital finance significantly gives people as well as businesses access to payments, savings, and credit products without the need to step out to a physical bank. It can turn a smartphone into a wallet, a checkbook, a bank branch, and even an accounting ledger. Technological advances also help solve some of the key challenges of accomplishing full financial inclusion.
Cloud services, for instance, can help businesses host applications and store data remotely without the need for on-premise servers. Today, most platform providers have a cloud version of their software to support virtual hosting and maintenance. Shifting to the cloud requires considering core ERP systems along with non-core systems such as T&E tools, reconciliation tools, investment accounting systems, financial planning and analysis systems, and financial reporting tools and others to enable end-to-end integration on cloud-based platforms.
Virtual finance operations can also lower the cost of providing financial services. In this financial function, CFOs’ roles become more crucial to perform risk assessment, cost control, cash flow management and financial reporting and more.