Finance digital transformation: 5 key rules & tools for 2022
Published on September 26, 2022
The digital transformation has been in full swing for years. Digitalization offers more efficiency and gives finance teams the space they need to add real value to companies.
But what does this finance digital transformation look like in practice?
As part of the 2021 CFO Connect Summit, we invited experts to discuss the people, structures, and technology needed to build a digital-first finance function.
Our guests are all finance experts, tech aficionados, and have their own perspective on digitalization in finance. Watch the full recording of their conversation here, or keep reading for the highlights.
About the experts
Pavla Muzarova is CFO at Mews, the hotel property management system. She has 8+ years of experience in finance in the hospitality sector, and is a big tech and automation enthusiast.
Quentin Servais Laval is Director of Finance & Operations at Double, which connects busy executives with experienced part-time assistants and delegation tools. Prior to this role, he worked in corporate finance in Asia and North America for the Louis Vuitton group, and launched the Canadian market for Instacart.
Johan Neethling is CFO at Rainbird Technologies, a decision automation platform. Prior to this, he trained as a chartered accountant at PWC and worked in the finance teams for some of the world's largest companies.
Charles Tenot is Chief Business Officer at Skello, a European hyper growth startup revolutionizing workforce management for global companies including Accor, Adidas, and Starbucks. He also founded the Business Operations Network, a private group for operations professionals.
1. Automate digital processes to support finance team growth
Growth brings many challenges, and automation has become a critical need for businesses. As a company and its various teams grow and scale, the finance team needs to undergo its own digital transformation. Thus, identifying the right digital processes to automate and leverage is key for finance professionals.
According to Pavla, whose company manages 2,200+ clients, there are two priorities to handle. The first one is billing, “because our pricing and billing is quite complex. We offer payments processing, but also subscription billing. We have one-off fees, transactional fees. Tracking all this, we have had a hard time to find one external tool that would cover it all.”
To answer this lack of adapted solutions on the market, Mews developed its own tool in-house. “We created our own subscription management within our product. Then from there, we use Zapier and sync the data to Salesforce and our financial stack.”
The second key process to automate early, according to Pavla, is universal to most businesses: managing the general monthly close process. “With so many people and so many dependencies, if we really want to close in five to six days for the full P&L, we need to have everything set up. We use Asana and task tracking management there. That's one of the things that are quite robust, actually, that I would really recommend to anybody.”
2. Get the right tools for modern finance operations
For Quentin, despite Double being significantly smaller in terms of size, the challenges are similar: “The finance team is only one-and-a-half people, but our challenges are exactly the same. It's billing our clients, because we have a lot of pricing exceptions, a lot of data coming from our systems et cetera, and then monthly closing.”
To address these challenges, though, Quentin adopted a different, centralized approach. “We use QuickBooks for everything accounting and some of the reporting. We leave the source of truth inside QuickBooks, and we have everything flowing there.”
This rest of Double's financial tech stack includes:
Stripe for invoicing
Carta for cap table management (employee ownership)
An automated Google Sheets script for billing
Zapier to connect most systems
But the key for Quentin is “to make sure all the information is flowing automatically between all these systems.”
However, finance digital transformation requires specific skills. As Quentin says, “I'm lucky that we're a technology company. We do have some engineering resources. When it's core to the organization, we can make those investments and create those scripts to make it easier for the finance function.”
3. Centralize data from your sprawling tool stack
When Pavla chose the digital tools for her finance team, she was managing 14 people. And as she recalls, “I didn't expect that we would be 300 in four years. I should have, but who knew?”
Today, Mews is still operating on its initial tools. “These are Xero, Dext for expenses, ApprovalMax for approvals. For reporting consolidation, we used Excel files connected to databases. It works on a refresh and it’s a stable enough sheet.”
The most important in her opinion is the way the company’s data is stored in a data warehouse. “The big part of our tech stack is also the warehouse, Microsoft Azure ETL tools, and synchronizers. We're making sure that all of the tools that we use in the company are connected, all together in one data warehouse. Lots of the things that we should have automated with ERP, we automated through database connections and setups.”
For Quentin, having a "data lake" - a centralized repository to store all your structured and unstructured data at any scale - “is absolutely key nowadays. The most important thing is that all of the data is flowing to the same place. This way we can analyze it, play with it all together."
Whatever the source of truth (BigQuery for Double, Xero for Mews and Zoho + Xero for Rainbird Technologies), building a robust data warehouse lets finance teams support their wider company digital transformation.
4. Build your own digital bots
For Johan, beyond the need to manage processes more efficiently, comes another challenge: scaling finance without having to hire more staff.
To do so, the team created a digital finance bot which “was able to take over how we deal with R&D internally. We've taught it how to spot R&D in the business, in the same way a human would do. Via Slack, on a monthly basis, the bot speaks to the department heads and flags any new project as being related to R&D or not.”
Beyond this task, the finance bot is now being trained to support more of the finance digital transformation at Rainbird Technologies. As Johan says: “We've got a whole list of things that we're working through, and our finance bot is learning new skills all the time, which is really helpful. We're scaling our finance function with only two of us.”
5. Hire and develop digital skills
Mastering data-related skills can come in very handy in the first years of an organization. As Quentin asserts, “there's a lot of skills that we learn in software engineering that are useful in finance, and both of them are interconnected.”
And his team is digitally savvy. “There’s no position that doesn't need a data-driven approach and doesn't need to leverage technology. When it comes to my personal mix between finance and operations, it's interesting because we have everything under one roof and then can find the best person to manage each function as we grow.”
In the future though, as the company scales, he intends to bring in more expert talents. “As we grow we'll be able to hire someone who's really focused on adding the value that we cannot bring from those systems.”
And Pavla agrees with this approach. Her third hire was a technical student who knows SQL well and can create macros and basic automations to support the finance team.
"It makes things much easier for the rest of the team when they don't have to export journal ledgers from accounting and then create pivot tables. They already have a Power BI report where they can simply filter out the accounts they need."
"I would definitely recommend hiring somebody with SQL, at least reporting, and maybe annual ledgers as early as possible.”
And once the organization has started to scale, it doesn’t mean that data-related skills become irrelevant, on the contrary. For Johan, technical hires become more important as the company grows. “If I have to hire someone in the future, I think it would be a data scientist. I need somebody that could look at data and mine the insights beyond finance.”
And for finance professionals who are unsure how to identify and gauge the right talents for their team, Pavla recommends relying on other team members. “Asking a fellow developer to help you to identify that person in an interview could help. I’ve had colleagues check people that I was hiring, that were more technical than I am.”
Make digital transformation a key finance goal for 2022
"Digital transformation" is thrown about so often, it's almost a cliché. But while businesses everywhere agree that it's important, most have barely begun the process.
Even worse, finance teams are often the last to benefit from new technology. Many are stuck with paper receipts and invoices, unwieldy Excel tables, and endless back and forth with other teams.
Put digitalization at the top of your to-do list for 2022. And you can start by conquering the month-end close process, and company spending overall.