Data Interoperability: How Finance Departments Can

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The world around us is changing faster and faster and financial departments cannot always react adequately. This results in fluctuating numbers in the financial systems, which must determine the impact on business performance.

To do this, real-time analyzes are necessary, consisting of a compilation of all the information relating to the turnover of the company which can highlight indicators of business opportunities or pitfalls. But how detailed should this analysis be? And what information has commercial value? I tell you in this blog!

Embrace tomorrow’s digital financial processes

To address this challenge, a new set of tools and technologies are being developed, such as artificial intelligence (AI) and predictive analytics, which automate data collection at a scale and speed never before possible.

It also helps finance professionals get rid of all manual data entry and spreadsheets. They can thus transform themselves into someone who shows, with the help of financial analyses, how to influence the performance of the company. By embracing AI and intelligent automation, the finance department can run a business based on hard numbers and translate them into a language that makes it easier for business decision-makers to understand.

Run the business based on financial data

To achieve this, organizations must go through three steps: record all financial data, create value, and retain it. The underlying financial systems must be designed in such a way that the finance department is able to establish budgets and forecasts and compare them to current figures and business priorities. The finance department can thus provide explanations for discrepancies and rectify erroneous assumptions in forecasts. Finance professionals can then outline action items and assign them to different business units and teams. This approach also allows the finance department to respond to ad hoc requests for status updates, highlight trends in real-time, and more accurately predict the impact on business performance.

Data interoperability issues

But to achieve this, a solid foundation is essential, data interoperability being particularly important. Financial data is currently hidden in all sorts of systems and is not always reliable as it is often manual work. This is why the approach to data integration should be carefully considered. The quality of customer and supplier master data in all financial administration systems must be checked and guaranteed. And this is a task for the finance department.

Technologies that can help in this regard are REST-APIs which, in combination with low code, can offer new flexible possibilities within financial systems. In addition, smart invoice processing (SIP) helps automate creditor invoice processing and perform predictive general ledger analytics. This allows for substantial savings and faster payment of creditor invoices while leaving more time for staff to carry out tasks that can make a difference. Similarly, smart invoicing recognition (SIR) services make it possible to record creditor invoice data scanned using artificial intelligence.

Finance departments that bring order to data interoperability can enable the business to do more with financial reporting and act as strategic partners. Business decision-makers can then expect the following from the finance department:

  • Constant current year forecast: Modern financial planning and analysis (FP&A) systems should always be viewable rather than being used only for traditional quarterly reporting. The business should be able to add new data at any time, while the finance department decides when to report.
  • Regular status checks: It is important to have control over who has access to the FP&A system and to check who has not yet added updated information. This way, you can clearly see who made decisions and get a 360-degree view of business performance.
  • Reports that tell a story: Financial reports should be more like reading a newspaper, with executive team members having access to ready-to-use summaries at any time. To do this, the finance department must distill all financial reports and business input into a standardized report.

Working on data interoperability can be a big, long journey. It may therefore be advisable to focus on small projects first. For example, first, solve problems for a specific financial process or a specific business unit using automation and intelligent data analysis. From there, you can develop and help run the business with the right and relevant financial documents.