18 September 2017 | By EY Community

The future of the finance function for MSBs

Finance teams in growing businesses are overstretched, yet better data analysis can provide bigger opportunities

Q. In your experience, how are skills shortages affecting finance teams in mid-market firms?
A. Skills shortages often mean that businesses have to pay more to attract talent and when roles remain unfilled, finance teams become overstretched. This is at a time when they have an ever-increasing compliance and reporting burden, alongside growing operational responsibilities. These teams are spending a significant proportion of their time focused on historical data and they have limited capacity to partner with the wider business to drive strategic decision making. So they are not focusing so much on forward-looking projects to drive growth, including automation, or investment in new technology.

Q. At the same time as capacity being stretched, the rise of big data offers extra opportunities for companies looking for growth. How are the forward-looking finance teams, with the manpower in place, using this data? What difference can it make?
A. Forward-looking finance teams are using big data to make better decisions and provide more strategic advice to their boards. This enables companies to make more informed decisions as to resource allocation, new market opportunities and cost-saving initiatives based on high quality management information.

Q. You’ve recently launched EY Absolute, a digital platform delivering bookkeeping, accounting and tax services. Are businesses comfortable with outsourcing these services?
A. Many of the services which fall within the EY Absolute platform have traditionally been outsourced (including corporate tax and VAT compliance, payroll and statutory reporting). We are however seeing an increasing trend in the outsourcing of high value processes such as management accounting and month-end close, consolidation and planning, forecasting and budgeting.

Businesses may have historically had some concerns over the “loss of control” often associated with outsourcing. However, services such as EY Absolute seek to address these concerns: the use of cloud-based technology enables collaboration with clients, giving them real-time access to their data and full visibility of the status of the services being provided alongside a dedicated finance team, which effectively provides an extension of their own finance function.

Q. What kind of insights can you deliver that a team would struggle to find themselves?
A. As a large organisation, we are able to bring a collective and diverse experience and an objective viewpoint. The breadth of our experience enables us to provide benchmarking and insight as to how the finance function is performing vis-a-vis peer organisations. In an ever-changing technology landscape we can also share insights as to how companies can use smart technologies and advanced data analytics to make better strategic decisions.

Q. What do you think the finance team of the future will look like?
A. Digital disruption is likely to have a significant impact on the future finance function. Finance staff who are able to understand and implement new technologies and lead innovation will be increasingly important. With the right technology in place to automate transactional processing and drive high quality data, the finance team will then be able to focus on higher value tasks, partnering with the business to generate strategic insight and grow the business.

By Tina Gill and Julie Hadfield, both partners at EY 

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