The digital wave that transformed company operations, customer service, and marketing has swept into finance departments. From accounting and payment processing to financial reporting and strategic forecasting, an assortment of innovative digital tools are automating functions and interpreting data.
The question facing chief financial officers and other executives is whether their finance department staff is up to the task of implementing and maximizing what these digital tools offer. According to Deloitte, today’s finance talent models place a premium on data scientists, business analysts, and storytellers. To help financial department employees sharpen their skills and embrace the new digital frontier, Simplilearn is assisting companies to bridge the information gap with its planned upskilling program using a customized portfolio of flexible, online courses.
Simplilearn is a world leader in online education, teaming with the world’s leading universities and companies to help organizations embrace digital transformation.
Digital Strategy Comes to Finance
According to Strategic Finance, finance departments play an essential strategic role in leadership. First, they have a complete overview of the organization. They drive performance, implement transformations, and help organizations achieve their strategic ambitions. Further, finance’s early input into digital strategy is vital for adequate risk management and compliance.
Staying abreast of technological developments is crucial because finance departments have a dual role in a company’s digital transformation. First, finance departments serve as the company’s cost gatekeeper for investing in digital equipment and upgrades. Second, it needs to ensure its own department’s adoption of technology and skills are advanced enough to serve the company’s needs.
In short, having a top-notch, digitally savvy finance department increases its efficiency and frees up time for its role in strategic leadership.
The Modern Face of Finance Departments
Some of the digital innovations in finance departments include:
Natural Language Processing
The accounting function used to involve transcribing information from paper records onto accounting ledgers. Accounting ledgers have been digital for many years now, but the need to transcribe data remains. However, with natural language processing, artificial intelligence, and pattern recognition, the transcription task is automated. Machines can read the information directly from digital images, validate it, and interpret it before entering it into digital ledgers.
This technology has transformed how accounts receivable departments process payments. Previously, checks needed to be recorded by hand, endorsed, batched, tallied, and taken to the bank for deposit. Now accounts receivable can scan a check, transmit its image to the bank, and receive an instant deposit confirmation.
Digital Payment Systems
Many transactions no longer involve paper. Finance departments can take advantage of data flows created by digital payment systems to record expenditures and receipts electronically. For example, electronically filing expense reports gives the company additional spending control by setting conditions for approved expenses.
Processing and Tracking Records
From procurement and production to inventory and sales, the finance department had to process mountains of paper and digital records of materials, work in process, finished goods, and equipment. Now, IoT (Internet of Things) technology can track materials and work through the enterprise. It can monitor the use of production equipment and keep tabs on inventory levels and locations. Purchase orders sent to suppliers and received from customers increasingly come in digital form, readable by a broad range of financial systems.
Artificial Intelligence (AI)
AI has enabled finance departments to interpret historical data, detect patterns, and create models to predict how changing conditions will affect the enterprise. For example, in some industries, AI-powered models can look at weather forecasts and advise whether demand for the enterprise’s products will increase or decrease, allowing finance departments to plan accordingly for capital needs.
Blockchain and Cryptocurrencies
Digital strategies are even changing the nature of money. Cryptocurrencies (made possible by blockchain technology) now stand alongside ordinary government-issued currencies and require new ways to accept or issue payment. They also increase the need for AI-powered currency risk management, as their value is more volatile than most currencies. Strategic Finance found that while blockchain isn’t used widely in finance departments, several organizations are examining the value of process mining, which is designed to “improve process efficiency, analyze bottlenecks, explain process deviations, and confirm the adequacy of internal controls.”
Finance’s digital transformation affects how enterprises manage capital. Investing cash and other liquid assets now requires various digital techniques and tools, including data analytics, to evaluate portfolio risk. Finance departments can now apply similar strategies to assess proposals to invest in R&D and product development.
Financials on Demand
The traditional finance cycles give way to producing actuals and forecasts on demand. According to Deloitte’s report, Finance 2025: Digital Transformation in Finance, finance organizations will still need to meet external demands and produce cyclical information. However, internal and external constituencies require more frequent performance information. Deloitte said that many finance cycles are driven by technology and data-processing limitations. “But when information becomes instantly available to those who need it, traditional cycles become unnecessary. That frees people up to focus on discovering new insights and acting on them.”
Leverage Simplilearn to Upskill Your Staff
Recruiting new talent and replacing employees isn’t necessarily a viable long-term strategy for finance departments. With Simplilearn, companies can retain their employees’ institutional knowledge instead of replacing personnel or outsourcing.
Simplilearn’s interactive learning approach integrates live online classes with mentoring, labs, projects, and self-paced learning videos to help busy professionals gain the tools they need to succeed.
Whether members of your finance department need to learn new technologies or brush up their skills, Simplilearn will tailor an education program that will boost your staff’s value and efficiency and bridge your company’s digital skills gap.