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  • Financial Risk Management

Financial Risk Management

Future-proofing your finance function to meet your future operating model.

Expectations of the finance function have changed: finance is no longer seen as the score keeper as a business moves forward. Stakeholders now require a finance function to be more strategic and forward-looking. It needs to be a true business partner.

What can BDO do for you?

We help finance departments streamline their processes, organisational structure, technology and management information, the ultimate goal being to support your financial function in transitioning into a valued business partner for the organisation and to help you embrace technology. Through our maturity assessments, digital tools and skilled professionals, BDO can help your organisation develop the right data model to deliver quality meaningful data that can be used to transform strategic and operational stakeholder decision making.

We are ready to provide you with clear perspectives on the opportunities available within your organisation using your financial information. Below, we outline some of the key aspects of what makes a leading financial function within any organisation.

Finance Transformation

Shareholders, regulatory authorities, supervisory boards and other internal and external stakeholders now expect more from financial departments than simply bookkeeping and preparing financial statements. They also expect them to undertake performance management, decision support and risk management & control compliance. And this against a background of progressive digitalisation, globalisation, legalisation and changing business models, all of which makes CFOs' duties more challenging and their environments more complex.

Advanced digital tools and data models result in companies being able to drive decision making based on forward thinking financial data. The use of structured financial data to make key strategic decisions has become essential in most organisations to remain sustainable and relevant. A future proofed finance function will improve organisational performance by providing insight using set data models to produce meaningful data to supplement underlying strategic and operational decision making.

In the context of digital transformation, the goal of finance transformation is to change the finance function of an organisation from that of bookkeeper to a business partner and to increase business value. The question is: how? And how can we use digitalisation trends such as data models and data analytics to make our finance function more effective?

Vision

The first step in a finance transformation is to define a vision: what do you want your finance function to achieve? Is the more traditional role of bookkeeper good enough, given the predictability and size of your business in terms of its cost/benefit ratio? Or do you see the need to become more of a business partner to stay relevant?

You will need to match your finance function to the vision you have defined, by developing its constituent parts – depending on your situation – to the right level. Entities need to apply an agile forward-thinking maturity model and implement a long-term plan to reach the desired vision over time.

Management information

Accessible, consistent and real-time data & management information are what distinguish a leading finance function from a basic performer. Stakeholders within entities read and use data and information differently. Applied data models must be accurate, unambiguous, consistent and directly linked to the strategic objectives and stakeholder needs. Information produced though data analysis should be a tool for insight and supplements underlying strategic and operational decision making.

Technology & tools

Strategic data driven decision-making is the cornerstone of a digitally transformed finance function. Systems and tools are key instruments in the digital transformation process and in a leading finance function scenario, systems are closely integrated with repetitive, manual tasks replaced by robotics. Decision-making processes are based on good, robust, standardised tools rather than loose Excel spreadsheets.

People & organisation

A future-proof finance function has detailed knowledge of the business and of the soft skills that are needed to convince people of its ideas. In such situations, employees are also closer to that business, so that the finance department can communicate its recommendations to the business effectively.

Processes & internal control

In a leading finance function, departments work seamlessly together from start to finish, with tasks having been automated where possible using systems supporting an automatic workflow and robotics where required. Process mining software is used to identify improvement potential at regular intervals, based on which processes can be streamlined further. Automated internal controls have also been built in and processes are managed on an ongoing basis using continuous control dashboards.

CONTACT A FINANCIAL RISK MANAGEMENT SPECIALIST