Financial transformation is a managerial conceptual change in the way that a business tracks its financial activity. The project can include a change in the priorities of the company, such as the introduction of triple bottom line accounting. It could just be a decision to improve financial tracking IT systems. A takeover or merger is another reason for a financial transformation.
Here is our list of the six best financial transformation solutions:
- Oracle NetSuite: Best financial transformation solution in an ERP. This suite of business management software includes an accounting package it converts real transactions into journal entries and automates reconciliation and closing procedures.
- Tipalti: Best financial transformation solution for accounts payable. This procure-to-pay SaaS package supports all functions of purchasing supplies and paying for them, including a payment processing system.
- Redwood Finance Automation: Best financial transformation solution all-rounder. This cloud-based platform is an orchestration platform. It comes with pre-written modules but also allows you to set up your data flows and automated workloads interacting with any software package.
- NetGuardians Internal Fraud: Best financial transformation solution for embezzlement detection. If you suspect fraud might be prevalent in your organization, this orchestration system imposes checks on financial transactions and is particularly recommended for banks.
- BlackLine Continuous Accounting Hub: Best financial transformation solution by orchestration. This system searches through existing stores of transaction data to reconcile accounts before closing and can identify irregularities.
- Planful: Best financial transformation solution for financial planning and analysis. With this cloud-based package, you can identify cash flows and expected income, thus improving planning and analysis capabilities.
The main focus of financial transformation is a change in working practices. This could be driven by a change in corporate strategy. However, from the perspective of IT systems, it means either replacing existing systems, altering their settings, or enforcing better use by staff of existing systems.
One important trigger for many businesses to undertake financial transformation is the need to impose fraud prevention measures or an external requirement that imposes better accountability on the company, such as the Sarbanes-Oxley Act (SOX).
Requirements for financial transformation
There has to be a reason for the financial transformation. It could be a decision by management in response to the greater accounting needs of a growing company or it could be regulatory requirements. Whatever triggers the project, the main participants in the exercise will be the Board of Directors and the Accounting Department.
It is very common for businesses that are undertaking a financial transformation to hire a consultancy to advise them on the project. However, that is not a legal requirement. Specialists in the business, such as the Chief Operations Officer, the Chief Information Officer, and the Chief Financial Officer can get together and work out a plan for themselves.
The consideration of IT system alterations comes in a little later than the startup of the project. This is because the project’s goals need to be defined in terms of business processes initially before IT systems can be addressed. For example, if it decided that the biggest problem the company faces is a complete lack of suitable IT systems, An acquisition plan needs to be formulated. If the business already has extensive IT systems in place but key employees refuse to use them, the enforcement of corporate policy and user training would be needed.
IT systems for financial transformation
As explained above, IT systems are not the primary subject of financial transformation. However, they need to be able to fully support any new policies.
Unavoidably, any new financial policy will need to include strategies for detecting fraud and compliance with regulations. Both the IT industry and management consultancies recommend a move towards system centralization. This involves unifying all sites and branches so that their data is stored in one place. Such a policy enables closed-loop data flows, which populate accounting systems with transaction data automatically.
Automating data flows removes the risk of human error in transposition and it also flushes out fraud because centralized data stores can be more easily scanned for irregularities at all times of the year. Centralized systems promote cost savings by encouraging more competitive bidding for supplies, which can be supervised by the head office, destroying local fiefdoms, which open up the possibility of grift.
So, your financial transformation policy is going to be supported by a centralized and unified IT system. There are two ways that you can implement this strategy. The first of these is to use an ERP system that has an integrated accounting package. If users are trained properly and corporate policies are enforced. This will result in all activities being primarily recorded in the IT system – no cash backhanders or local spreadsheet secrecy will be possible.
The introduction of a single ERP can provoke resistance among managers who feel threatened by the exposure of their lax but familiar working practices. ERP implementations can often provoke an outright war between divisions and departments. However, there are IT systems available that can scrape all relevant data from seemingly incompatible systems and even search through spreadsheets for pertinent information. These are called orchestration packages.
With orchestration, you can knit together a unified system that has all of the benefits of an ERP without requiring any of the existing software used within the business to be changed. So, you can secretly implement a new financial policy without provoking resistance among influential actors within the business. They won’t know that anything has changed, but you will get to know everything they are doing by analyzing the accounts on an ongoing basis.
Orchestration systems are particularly useful for enforcing regulatory compliance, eliminating fraud, and making close management and automated and efficient process.
The best Financial Transformation solutions
When looking for the best IT systems to support your financial transformation, we prioritized systems that will centralize and reuse data to provide greater processing efficiency and we also identified solutions that will help detect fraud and keep the business compliant with national regulations.
What do we look for in the best financial transformation solutions?
When looking for the best financial close automation software, we prioritized the following factors:
- Cloud-based systems – SaaS packages are usually more secure because the businesses that run them can afford to implement strong security measures, distributing the cost over many clients. Cloud-based systems do not need the client to run a host server or keep technicians on staff.
- Constant reconciliation – Ongoing reconciliation enables businesses to spot irregularities and fraud quickly rather than waiting until year-end to discover that the accounts don’t add up.
- Automated data flows – Pooling data or automatically generating accounts from operational data.
- Security – Cloud-based systems, particularly orchestration packages, move a lot of financial data back and forth. These transmissions should be secured. All access to the system should be controlled by individual user accounts for accountability of action.
You can read more about each of our recommenced solutions in the following sections.
1. Oracle NetSuite
Best financial transformation solution in an ERP
Oracle NetSuite is going to be your best option if the financial transformation project decides to replace all existing siloed applications and go for a unified system. NetSuite is a SaaS package, so you won’t need to host or maintain the software. It is available everywhere through any standard browser, so there is no complicated installation process to get the system on the desk of every employee in all branches in all countries.
As an IT manager, you won’t be invoiced in the initial definition of the financial transformation aims. However, you can expect that greater unification of systems, easier supervision, process automation, and compliance enforcement are going to be in there. Oracle NetSuite delivers all of these.
As an ERP, Oracle NetSuite provides all of the screens needed to operate all of the functions of the business and the information that is entered into them gets stored centrally. This makes tasks such as matching and automatic journal entry creation standard system functions. It also automates reconciliation at period close. There will just be a need for decision-making over how to treat incomplete transactions when it comes to the end of the year. Individual accounts, role-based function menus, and an approvals hierarchy enforce procedural security measures and enable the tracing and reversal of any transaction.
2. Tipalti
Best financial transformation solution for accounts payable
Tipalti is an online solution that is built around a payment processing system. This is a currency platform with bells on. The “extras” in the Tipalti system provide you with a complete procure-to-pay package. You can manage suppliers, put out requests for quotes, organize bids, order, receive, process invoices, and make payments within the system.
The Tipalti solution is particularly useful for multinationals that have to deal with currency exchange when operating and also when consolidating the books. The system can deal with different tax regions and it can also offer fixed exchange rates through hedging, which makes accounting for currency conversion a whole lot easier.
The Tipalti system can be integrated into ERPs and accounting packages.
3. Redwood Finance Automation
Best financial transformation solution all-rounder
Redwood Finance Automation is a great tool for financial transformation projects because it is very flexible. The system has some preset actions that move data from ERPs to journals and then automate reconciliation before closing. However, it also has a process flow diagram system that automatically gets interpreted into scripts.
The script creation function means that the IT manager can be ready to support whatever financial transformation your business’s leaders decide upon. The system can implement new policies by interacting with existing software packages. This means that the tool can switch financial strategy behind the scenes without causing any upheaval or introducing a public change that enables saboteurs within the company to drag the transformation down.
The discrete nature of Redwood also means that you can introduce new technologies and detection systems without the user community knowing about it. This is a SaaS platform, so you don’t have to host t on your site. The cloud location means that the tool can be used to automate processes on remote sites. Thus, you can also unify the control of data processes on many sites and introduce centralized scrutiny, again, without allowing local managers to resist change.
BEST FINANCIAL TRANSFORMATION SOLUTIONS ALL_ROUNDER
Redwood Finance Automation is solid choice for financial transformation support because it can be implemented behind the scenes without changing any of the software that operations and accounting staff currently used. This is a hosted package, so it doesn’t require you to employ your technicians to maintain it. The system is flexible and can be used to implement any new financial management policy.
4. NetGuardians Internal Fraud
Best financial transformation solution for embezzlement detection
NetGuardians Internal Fraud is a SaaS platform that uses AI to detect insider embezzlement. The system is designed for use by banks. However, it can be applied by any business type. It is particularly useful for digital systems that include customer accounts. This system focuses on the activities of employees, NetGuardians has another package that deals with fraud attempts by customer account holders.
The NetGuardians system uses AI to identify illogical behavior by employee accounts., This will also flush out account takeover activity. If a user has access to any opportunity to extract money from your business, either through dud invoices for bogus goods, unwarranted refunds, or unauthorized payments, the NetGuardians system will spot it.
NetGuardians won’t replace your ERP or accounting package but it will improve your fraud detection.
5. BlackLine Continuous Accounting Hub
Best financial transformation solution by orchestration
BlackLine is an orchestration platform that is delivered from the cloud. That means you can use this service in the background to collect data from different systems, generate journal entries, reconcile accounts, and consolidate reporting for parent companies.
This service will implement your new financial management policy without disrupting the way your departments and divisions operate today. If the financial transformation team wants to impose new working practices, that’s fine, your can enforce those by reassessing front-end apps and that won’t change how BlackLine operates to centralize data.
BlackLine also offers a task management structure for the accounting team. So, if your business’s transformation requires better organization in how the accountants operate on a day-to-day basis, you can set that up with out-of-the-box tasks list templates for staff and process flow overviews for team managers.
6. Planful
Best financial transformation solution for financial planning and analysis
Planful is a cloud-based package that provides functions for financial planning and analysis (FP&A). It could be that your business’s financial transformation project can’t fully get underway because it is being held up by a lack of visibility into the company’s performance. In that case, phase one is going to be the introduction of financial planning tools and that’s where Planful comes in.
Planful works like an orchestration system because it interfaces with existing ERP and accounting packages to extract data for analysis. The system doesn’t interfere with data processing tools. Instead, it sits to the side and can extract data with more than 200 connectors to third-party software packages.
With the Planful system, you can define continuous analysis that will give you live updates in its browser-based dashboard and also use the data lake for ad-hoc planning.
