Connected finance empowers today's modern CFO

At Baker Tilly, we believe that the finance and accounting function and the CFO should be a strategic business partner to their organizations, and they have a unique opportunity to help build the future of those organizations. A recent article in the International Business Times titled, "The Future of Finance Is Connected Finance" does a wonderful job of illustrating that perspective. The article focuses on the concept of "connected finance" and its importance to this vision of the role of the modern CFO and finance teams.

Connected Finance Is Necessary Now

Connected finance, according to the author, Abhinav Tiwari, is necessary for the strategic role of today's CFO who needs real-time data – a key element for them to make faster, smarter decisions. CEOs that need to make these decisions are relying more and more on their CFOs for the insights they need. CFOs are no longer just providing GAAP financial statements days or weeks (if they're lucky) after month-end close. Many CFOs are still stuck with this dated information. According to Tiwari, "This makes seeing around corners challenging."

The move to the cloud and the adoption of API-connected systems has obviously improved this situation, but Tiwari points out that that's not the end of the story. Even if you move most or all your systems to the cloud, they aren't necessarily connected or connected enough to overcome the challenges. The systems are often still siloed and poorly connected. Spreadsheets are still heavily used to manage exported and consolidated data. Data pulled into a spreadsheet is by nature not real-time, not trustworthy, not connected, and not truly unified. 

Tiwari mentions companies that have tried to integrate their data using tools like Tableau that pull in and allow analysis of data from multiple systems, including spreadsheets. But he points out that, "these systems have their own problems. These systems are not systems of record. They can display data from many sources, but they cannot add data that immediately impacts the analysis." 

He goes on to write, "Modern CFOs with their finger on the technological pulse have noticed this problem. They have started asking, why do we need data exported from a cloud to a spreadsheet to analyze it? Why can't we be plugged into the original flow? Why are we disconnected both from our systems and reality?"

Automation is the Solution

While Tiwari does a great job of stating the problem faced by the modern CFO, he leaves the solution open-ended. We believe that we have curated that solution for our customers and the industries we serve. We believe that the system of record should be the accounting system (or ERP or Financial Management System, depending on preferred language). We believe that system needs the ability to pull in nonfinancial data from other systems so that metrics and KPIs can be calculated and displayed. The pulling in of data should be through API integrations that allow for that data to be updated in real time.

One of the best examples of a solution like this is Baker Tilly’s SaaS Intelligence product built on top of the Sage Intacct development platform. Sage Intacct natively allows for statistical or operational data to be pulled into the accounting system and stored in statistical accounts. Sage Intacct also has a powerful native integration with Salesforce that enables the system to manage subscription billing, revenue recognition, and advanced contracts– all must-haves for today’s booming SaaS and subscription businesses.

SaaS Intelligence adds an intelligent engine that automatically analyzes and categorizes SaaS and subscription transactions to deliver a host of metrics and KPIs, including more than a dozen types of Committed monthly Recurring Revenue (CMRR) as well as other KPIs such as Customer Acquisition Cost (CAC), Customer Lifetime Value (CLTV), Gross and Net Dollar Retention Rate, Days Sales Outstanding (DSO, and many more.

This is a “connected finance.” Data from multiple business systems are available in real time in the accounting system of record, automatically providing industry-relevant metrics and KPIs that allow CFOs an CEOs to make informed business decisions. 

Please contact us to learn more or to start a conversation about how you can turn your finance and accounting function into a connected finance and accounting function and therefore a strategic business asset.