From AI to advanced analytics, this digital transformation is particularly impactful for mid-market companies – businesses are predicted to reach a market value of $37.63 billion by 2032. These companies sit between small-scale startups and large enterprises, each requiring flexible and scalable technology solutions to facilitate growth and enhance their financial management.
Despite their promising growth potential, mid-sized businesses, particularly those with CFOs implementing new strategies amidst high-tech integrations, face unique challenges. Striking the balance between achieving financial visibility and control while avoiding the complexity and costs of ERP platforms is a significant hurdle.
How can mid-market companies leverage technology to overcome financial management challenges and support growth ambitions? As these businesses scale, the role of customisable, scalable financial technology solutions becomes increasingly crucial in driving success and staying a step-ahead of competitors.
The mid-market tech challenge
Mid-tier CFOs face a range of challenges as mid-market value increases, with real-time data access becoming crucial for understanding financial positions, planning future strategies, and creating accurate forecasts. Obtaining this data can often be a real bottleneck. As revealed in AccountsIQ’s Confessions of the finance function report, a quarter (25%) of senior finance professionals said they were frustrated by their inability to extract data insights or business intelligence from their financial management systems.
As mid-market businesses grow, CFOs encounter increasing complexity in optimising their tech stacks, developing financial strategies, and managing reporting cycles, all while navigating the impact of AI in a volatile economy. The Confessions of the finance function study also showed that CFOs are having to fight to prioritise their workloads, with 81% of senior professionals spending only a quarter of their time on activities that support business decisions.
In this high-pressure environment, there is an increasing influx of CFOs opting to move away from traditional systems. However, the challenges associated with selecting the right systems can lead to a shake in confidence. The decision is compounded by rapid technological advancements and the need for seamless integration. But the steps taken by CFOs to weigh the benefits of legacy systems against modern solutions is crucial in an increasingly complex market landscape.
Legacy systems vs. modern solutions: which way forward?
The accounting sector and finance teams fueling the growth of mid-market businesses face a dichotomy: they are tethered to legacy systems while being propelled forward by technological advancements that show no sign of slowing down. The landscape is still grappling with manual data entry but is increasingly benefiting from automation and innovative tech solutions.
As the accounting software market evolves with AI advancements, the impact of technological change will continue to intensify. To harness these advancements and avoid falling behind, finance teams need to adopt a strategic, gradual approach to integrating new technologies into their workflows. This involves securing organisational buy-in and blending traditional practices with modern technology. Staying ahead requires more than just adapting; financial decision-makers must actively embrace innovation and ensure their organisations can adjust effectively to a rapidly changing industry.
What are the benefits of a tech-forward approach?
Adopting a tech-forward approach delivers substantial benefits that transform finance operations and drive strategic value. By integrating advanced cloud accounting software, for example, organisations can leverage automation to streamline routine tasks, enhance efficiency, and gain real-time insights. This shift not only reduces manual effort but also improves accuracy and decision-making:.
- Automation of Routine Processes:
Modern cloud accounting software automates tasks such as data entry and reporting, transforming finance operations and allowing teams to focus on more strategic activities like data analysis and business planning. - Efficiency Gains:
Automation extends to various tasks including processing supplier invoices, matching them with purchase orders, bank reconciliation, intercompany transactions, and revenue recognition. This can save days of manual work each month, freeing up time for more valuable activities. - Real-Time Data and Analytics:
Latest cloud platforms provide real-time data and analytics through custom APIs that integrate with CRM, inventory, and payment systems. This creates a unified view across the organisation, eliminating the need for manual data re-entry. - Enhanced Decision-Making:
With accurate, up-to-date information, CFOs and finance teams can make informed decisions, respond quickly to market changes, and drive strategic growth initiatives, thanks to the “single source of truth” approach offered by these platforms.
How can organisations implement and sustain digital transformation?
Implementing new technology is just the start of the digital transformation journey. To ensure long-term success, there are several key areas for finance leaders to focus on to ensure they can confidently integrate tech-powered strategies, transforming the finance function into a more efficient, data-driven powerhouse that adds significant value to the organisation:
- Staff Training and Support: Continuous learning is essential. Employees need ongoing training and support to confidently use new technologies and understand how they enhance their roles.
- Gradual Integration: Introduce new technologies into existing workflows gradually. This phased approach allows teams to adapt to changes over time, reducing resistance and ensuring smoother adoption.
- Adaptability: Ensure that chosen technology solutions are flexible enough to accommodate employees’ needs and work styles. This adaptability boosts user acceptance and productivity.
- Demonstrating Value: Consistently showcase the value of new technology through regular reporting on efficiency gains, cost savings, and improved decision-making capabilities.
- Continuous Improvement: View digital transformation as an ongoing journey rather than a one-time event. Regular reviews and updates to the technology stack keep the finance function at the cutting edge.
For mid-market businesses experiencing growth, success hinges on a finance function that evolves with the times. Modern cloud accounting and automation technologies are key to streamlining operations, delivering valuable insights, and positioning companies for sustainable expansion.
Digitising the finance function isn’t just about embracing high-tech trends. It’s about leveraging advanced tools for better oversight and freeing up time for strategic tasks, all contributing to more informed decision making that supports a long term growth strategy.
This article come courtesy of AccountsIQ. Take their online survey here.
