We haven’t heard the word ‘recession’ used seriously in more than a decade. The current US economic expansion is a record for our country, putting it at more than ten years old as of this past July. But, as the saying goes, all good things must come to an end. And if you’re listening to the ever-growing voice of the financial world, this expansion might not live to see its next birthday.
The prospect of contracting, or even slowing, the economy is foreign to nearly every worker under the age of 30. We’ve been in this boom for so long that the experience of those who lived through it is starting to fade. When the economy does inevitably slow, every organization will need to develop and execute on a winning strategy.
For finance, this creates a real opportunity to lead their organization as budgets are tightened, revenues and profits evaporate, projects are put under the microscope, cash conservation and deployment becomes even more critical, and nearly every other area of the business is impacted in some way. While the tide of a robust economy benefits everyone, the ebb of a weak economy will take a toll on those who are least prepared and informed.
What’s clear is that finance is increasingly in the hot seat for two reasons. First, the economy is showing real and frequent signs of uncertainty, which brings finance more request for insights, reports, and forecasts from more areas of the business. Second, finance is going to be relied upon to give financial guidance and direction to executives and the business when results are missed or projects need to be trimmed.
This may sound gloomy but there is a silver lining: finance has the opportunity to really shine in the face of the eventual economic adversity. Here’s how!
Position finance as the data gurus
Whether things are good or bad, you can always benefit from more accurate, granular, and timely insights into your business. More information allows finance to recognize changes or trends, quickly estimate how they might impact the business, and make faster, more informed decisions on what actions should be taken in response.
Even though we live in a digital world, finding, collecting, and consolidating the data isn’t all that easy. In fact, it’s very likely that your organization continues to run into roadblocks with siloed and disconnected systems and data. The typical work-around is to collect the data manually, email it to the right people, then manually consolidate it into spreadsheets, and hope that there are no mistakes.
Opportunity number one is to eliminate slow, tedious data collection efforts now. We’re well beyond the days of needing to desperately search for, download, and consolidate data. Systems are all easily integrated these days, even older on-premise tools as well as modern cloud-based solutions. Migrating your organization to an integrated, single source of data truth is long overdue.
Getting this out of the way before pennies start to get pinched is a smart move. You need all of the data to do your job, and your teams are wasting time on manual efforts when they should be focused on improving business outcomes.
Make every ounce of finance’s effort count
Your finance team is full of highly skilled individuals who provide a valuable resource for your organization. In other words, they shouldn’t be spending time cutting and pasting data, searching spreadsheets for formula errors, and formatting fonts and headings in a report document.
The insights finance generates need to be communicated quickly and clearly out to the broader organization. That takes the form of reports, dashboards, board books, and presentations. Just consider for a moment how much time your team currently spends putting those documents together. That’s time taken away from the strategic work of finance, and from searching for opportunities to guide the business on financial matters.
If you layer on the potential stress of a slowing economy and the increased demands from executives and the business to find ways to cope, you can see how essential it is for finance to ensure it can quickly react when needed. To do that, the team must eliminate as much as it can of the manual financial planning and analysis requirements now, , and it has to make sure that happens before budgets start to shrink. That’s where automation comes in to speed reporting, reduce the manual effort, and eliminate the potential for human error along the way.
Don’t be a victim of natural selection
We hear a lot about the evolution of finance. Those who evolve tend to be better equipped to survive the next disaster, be it a drought, a meteorite, or, in the business world, a recession.
Most organizations are doing well, and have been doing well for years. But when the inevitable downturn starts, it’s going to be difficult to make any changes or launch any new projects.
Finance has the opportunity now to become the strategic center of the organization, to be the single source of organizational data, and to eliminate much of the manual burden that wastes time and effort. Modern finance tools are there to enable these changes, but the time to act is now. And, even if the economy continues to grow, you’ll never be criticized for helping finance save money, right?