Changing Mindset in handling Finances
Updated: Nov 4, 2020
Last few decades has seen significant transformation in handling the business finances. Finance has moved from being merely book keeping and fulfilling Regulatory requirement activity to a robust function of managing Business Finances, Corporate Governance, Compliance & Risk Management, participating in business Operations and providing advisory services to the management.
This has challenged the finance professionals in many ways from being accountants to finance experts to foresee the financial challenges and helping organisations gear-up for the future or to deal with the challenging times. This integrated role of Finance has added tremendous value to the organizations in planning, organizing and enhancing the profitability and benefiting all the stakeholders.
Core shift was to look at the function more transparently and bringing automation in transaction processing, data mining and interpreting the data meaningfully to enhance the business efficiency. The organisations that did not work on strengthening their finance and governance realized this gaps soon when the profits started to drain or the limitations felt in business growth and their market valuation.
3 important mindset shifts
Vastness of the Function
It is realized that Finance, Corporate Governance, Risk Management, Assurance, Compliance, Management Systems are vast functions and one person cannot deliver everything. All these functions branched out as separate units specifically contributing different benefits to the business operations and for growth. The management needed the maturity and understanding to use this information in business appropriately including planning and strategy.
Using expert services through KPOs
The organizations became more liberal to use the expert services through KPOs, Advisory Services and experts rather than hiring full time resources that are scarce and outsourcing being more cost effective. It was also found that by delegating it to the right hands, the management could focus on their core business activities simultaneously getting the required output. Technology played a major role by beating geographical distances, big data management and speed of processing.
Wider role of professionals in Business Management
Government Regulations and the need for transparency of carrying out of business has spread the canvas to business analytics, shareholder and stakeholder requirements, business continuity and assurance frameworks like GRC, COSO, ISO, COBIT and participating in people management frameworks increased the demand for specialized professional talent.
Overall the change in perspective has done bigger good to the economy, investors and stakeholders including employees who enjoy better confidence, transparency and business continuity contributing to a relatively stable economy.
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