As the clock ticked 12 midnight on the 1st of July, one of the biggest revolutions in the Indian economy and the finance domain were realized. GST was passed: a single tax for every business transaction.
Companies have changed their processes, updated their report structure, and are fully prepared for this huge change called ‘GST’. But are they ready for changes which unlike GST will not be accompanied by huge fanfare and media attention? So to give you a heads up, we share some trends which you as a decision maker can follow closely.
According to a study, 64% of the annual budgets are obsolete after 4-6 months of creation. To keep the budget updated, rolling forecast is an upcoming practice. It is a way of budgeting which has been in existence for some time now, yet the adoption rate has been minimal. The primary reason is resistance to change. Companies who have adopted this technique can swear by the advantages. Yet there are several who are still practicing static budgeting. Rolling forecasts give more accuracy, agility, and meaning to the numbers.
If your market is quite volatile, then rolling forecast will definitely help you.
‘AI’ is the current buzz word which has been doing the rounds and this can revolutionize the way MIS reporting is done. The current MIS reporting systems are highly complicated and at many organizations, slow. CFOs feel that fetching data from different sources, collating it at a place, analyzing it and then taking out meaningful inferences is a behemoth task and rightly so. Currently, it takes numerous days and multiple people to crunch data and the biggest roadblock is the ‘dependency’. AI will make the work quicker by eliminating any such roadblocks. There are systems being generated which will talk to the cloud (where the information will be stored) and do all the work for you, in minutes.
As mentioned above, cloud computing will form the foundation of every process and information will be available in real-time on any device. All finance processes will be automated soon, and human resources will be utilized for far more important things like process improvement, ideation, and execution of strategies to cut down cost or improve revenues.
For instance, when it comes to Expense management, startups were the first ones to automate this part of their financial management. They used solutions like Happay because they were short on human resources and had more trust in technology. But now even enterprises such as Arvind group of companies, Kajaria, Dharma productions, etc. are following suit. Technology will only aid in the inevitable that is the evolution of the role of a finance team, which brings us to the next trend.
CFOs, heads of finance, accountants, and other members of the team have always been perceived as people who crunch numbers but this is going to change. The finance heads will move beyond the role of budgeting, expense management, revenue tracking and play a more strategic role. The skill set will require analytical thinking, people-oriented policy- making and other business intelligence thought processes. This may involve heads to take up executive courses to hone different skills. It will lead to smarter revenue forecasting, quicker decision making, and better cash flow management.
These are 4 areas, which require your attention and we will keep you updated.
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