Finance leaders in all types of organisations are grappling with a common challenge: the elusive goal of visibility and control. With only one in five companies able to forecast mid-term cash flow within 5% accuracy, it can be surprisingly difficult to answer seemingly simple questions: What are we buying right now? How much are we paying and under what terms? When is the best time for cash to leave the company?

Businesses are increasingly turning to automation and networked solutions to break down silos, increase visibility across the whole P2P process, control spending and build stronger, more strategic supplier relationships. But in the quest for better corporate performance and financial agility, CFOs can’t afford the disruption or distraction of a cross-functional project to deploy an unwieldy on-premise Finance and Accounting (F&A) solution that may no longer fit the needs of the business in a matter of years. Traditional enterprise applications have limitations: tying up capital investment in infrastructure and application licenses, variable service levels, and inflexible legacy business processes. And with Finance leaders expected to play ever more diverse and challenging roles, it may be tempting to leave technology decisions to the CIO agenda.

Beyond the generic benefits of pay-as-you-go IT

Cloud-based F&A solutions have matured and are gaining widespread adoption among organisations of all sizes. Built for agility, they offer a faster, more accessible route to streamlining F&A processes and improving financial and business performance through insight generation, automation and speed, and higher levels of control.

From  an IT standpoint, all the usual cloud benefits apply: with scalable resources, there’s no need  to invest in excess capacity to anticipate “what if…?” demand. Tech teams aren’t required to keep the lights on in the data centre, handle administrative tasks such as patching and application updates, or worry about access control, intrusion detection, virus protection and disaster recovery, since these all come as part of the cloud service. Economies of scale result in lower total cost of ownership, enabling a level of service that growing businesses would struggle to afford with in-house specialists.

Financial visibility is better in the cloud

But what difference does cloud delivery make to CFOs? Rather more than you might imagine. Modernising F&A systems is not an IT project, but a business priority that allows inefficient legacy processes to be purged. Without underlying infrastructure considerations, cloud-enabled solutions can be specified by Finance, managed by IT (through the cloud solutions provider), and flexibly implemented with lower up-front costs for faster time to value. Cloud allows organisations to adapt nimbly to change: if a company acquires or divests a business unit, financial systems can be integrated or hived off accordingly, enabling business as usual during the period of transition.

From a risk management point of view, cloud software vendors can provide assured levels of solution availability and performance – which is critical once organisations become reliant on automated rather than manual, paper-based P2P workflows – as well as security, with the growing availability of financial platforms compliant with reporting and auditing standards for global business. Auditing is not only more straightforward but less costly, without the frantic scramble for information across disparate systems of record, while ongoing data retention enables easy access to transactions stretching back years.

Another aspect is the positive impact on supplier relationships. Cloud finance solutions make a buying organisation easier to do business with, through efficient collaboration – such as secure, automated ecommerce networks and self-service portals – while hiding the spaghetti-like complexity of the underlying distributed sources of data.  As well as strengthening negotiating power, improved visibility allows buyers to prevent vendor lock-in or monopoly within a given spend category.

Cloud puts CFOs and CIOs on the same page

Cloud services are blurring the boundaries between IT and Finance, as the influence of the Finance function grows in buying F&A solutions that support strategic goals, and CIOs become enablers of business transformation through technology adoption and governance processes. With these agendas aligned, the whole organisation benefits from both the high-level financial insights and  day-to-day functional advantages of cloud-based F&A, without the risks of shadow IT.  

If you would like to hear more about the latest trends and insights in cloud services we are running a free live webinar on June 1 with Ilja Summala, Group CTO of NordCloud Inc. and Lauri Palokangas, Product Marketing lead in Purchase-to-Pay cloud services of Basware.