The bottom-line is the ultimate measure of success in business. Profitability, liquidity and solvency form the health-triangle of a company. They are the key factors to support development, growth and prosperity.
Financial management may well be one the areas that have been affected most by the digitalization. Accounting has been digitalized almost totally during the last few years. Invoices, payments, salaries etc all flow digitally and the handling processes are fully automated. Gaining operational efficiencies and creating value by reducing the costs of doing business is equally important part of digital transformation than finding new revenue streams.
For the finance functions digitalization gives a great (and final) chance to turn themselves from internally focused scorekeepers to forward looking business partners. Senior management and other functions expect finance to have thorough business understanding and by being now able to switch it’s attention from transaction processing to business decision support it will reach more strategic role in digital companies. This usually means the rise of management accounting activities in a company.
Management accounting is our area of special interest. As we discussed in Corporate planning, a continuous planning process is the first step in migrating from analog company to an always-on, real-time and information rich digital business. And this sets new requirements to finance function operations. Continuous planning with constantly appearing new strategic opportunities and building of new strategic alternatives needs huge quantities of analyzed data and analytical business understanding to support the planning teams. Investment and divestment calculations, financing options and making all plans financially comparable may well be added to the list. All tasks for finance function.
Our projects have included finance function transformations, definitions of finance functions operations and tasks in digital businesses. We have built several customized solutions for companies including management accounting functionality.