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Real-time data and digitisation top of mind for treasurers

In the past month, financial automation and B2B payments software firm Serrala released the findings from its annual Future of Finance survey, which gauges the sentiments of global finance and treasury organisations. This year, the survey focused on how these organisations were impacted by the massive disruptions caused by the coronavirus crisis.

Results from the Serrala Future of Finance Survey 2021 show that boosting digitisation, working with real-time data and leveraging cloud solutions were high priorities for finance leaders as they struggled to maintain consistent cash flows. It also found that every area of finance - accounts payable, accounts receivable, treasury and cash management - had difficulty managing manual processes, which reduced overall efficiency and visibility, when global teams moved to remote work.

Liquidity, cash flow and working capital top concerns

Unsurprisingly, reduced liquidity, cash flow and working capital were the top areas of concern for many organisations in 2020. Respondents cited challenges such as "limited visibility into private company risk" and "reduced funding cycles" and some 47% stated that they struggled with cash flow continuity, making it the number one challenge for organisations during the crisis.

The survey also reflected a strong interest in prioritising improvements to cash management and forecasting (52%) as well as credit and risk management (48%).

Manual processes continue to be a challenge 

The majority of survey respondents reported that manual processes were a challenge during the crisis. It was the highest ranked issue in every area surveyed: accounts receivable (41%), accounts payable (41%), payments (39%), and treasury and cash management (44%). However, AP and AR teams faced difficulties capturing incoming remittance and invoice information and treasury and cash management teams had to deliver fast and accurate cash flow forecasts and liquidity reports.

Digitisation is necessary for remote work

The majority of finance organisations indicated that they are satisfied with their processes (77%), but one-third of respondents said the lack of digital process infrastructure (32%) and standardised/automated processes (33%) slowed down key finance processes when the organisation began working remotely. Furthermore, 54% said it was difficult to change existing processes to achieve a greater level of digitisation.

Based on the events of 2020, many back-office jobs will remain at least partially remote for the near future. As a result, companies will need to embrace new digital infrastructure and process change if they want to improve speed and agility in finance.

Access to real-time data is an emerging priority 

One interesting finding from this year’s survey was the shift in the top priorities of finance and treasury leaders. Two-thirds (66%) of respondents put real-time data at the top of their priority list for 2021. This indicates that organisations are no longer simply interested in applying technology to reduce processing costs or eliminate manual tasks, which were the top priorities in the 2020 and 2018 surveys.

Serrala says that its discussions with customers such as Hitachi and Zurich North America over the past year also showed that real-time data was a core topic for many organisations. They emphasised the importance of using real-time finance data to help them successfully manage cash flows, liquidity, and payments during the crisis.

Finance processes are moving to the cloud

Cloud continues to gain momentum in finance and treasury, as teams become increasingly comfortable with running some or all of their processes there. This year, fifty-six percent of respondents (56%) listed cloud as the top technology priority for their organization, followed closely by AI and machine learning (53%) and intelligent process automation (52%).

The ongoing transition from on-premise to cloud solutions in finance is driven by the fact that cloud solutions require a low initial investment, are fast to implement and provide a faster return on investment. In the Magic Quadrant for Cloud Core Financial Management Suites for Midsize, Large and Global Organisations report, Gartner indicates that "Finance organisations are increasingly shifting to cloud core financial management suites" (Gartner, May 2021). These suites "offer many advantages that enable a more agile organisation" including greater functional capabilities, faster introduction of new or differentiating capabilities, and industry-specific, best-practice solutions that will help transform the finance organisation.

Looking ahead

The positive outlook for 2021 demonstrated by 77% of organisations in the Serrala survey is very encouraging; however, the results also highlighted several areas where finance will need to make changes. Making smart investments in digitised processing and cloud technology today will help organisations build back from the disruptions of 2020 and create a stronger, faster and more agile finance department that is ready for the future - whatever it may hold.

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