Why Your Finance Team Should Be Intimately Involved In Your Cloud Technology Project - Forbes

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Finance teams are often one of the last departments in an organization to embrace cloud technology. They are understandably skeptical about migrating their company’s sensitive data to the cloud. And once this data is in the cloud, finance is concerned about losing control.

But recently, this skepticism has given way to acceptance and enthusiasm for the cloud. Fifty-five percent of U.S. companies use cloud technology for accounting and finance functions, and 11% exclusively rely on cloud technology for these functions, according to a new Robert Half study. Additionally, the study found that 20% are making plans to use cloud technology for finance.

As a former CFO who now helps CFOs transition to cloud computing, I am particularly interested in helping them understand why and how they should take advantage of cloud technology. I believe every finance team should be intimately involved in their company’s cloud technology initiatives. When a company implements a cloud technology platform, the finance team has an opportunity to rethink how they get work done.

Let’s start by examining the five main reasons why your cloud technology projects should always involve your finance team, with some suggestions as to how you can help facilitate this transition:

1. It's A Business Project, Not An IT Project

There’s a misconception that IT should completely manage cloud technology initiatives. While IT is capable of leading a cloud technology project, you don’t want to let your IT folks completely run the show. The parts that IT does best -- the technical aspects -- are only a small part of everything you need to do.

Your focus should be on morphing your cloud initiative into a business project that involves everyone from your CEO on down. Cloud technology has the potential to reinvent how every department does its work, including finance. You don’t want to let IT lead a transformation of this magnitude.

2. It Will Change How Your Finance Team Operates

Finance teams often pre-judge cloud-based platforms as being ill-suited for the highly specialized needs of accounting. They believe it would be risky to open up financial records to the rest of the business via the cloud. But I believe these concerns are misplaced -- and I'm not alone.

As other departments start opening up their records via the cloud, it changes expectations across the organization. As others begin to embrace this transparent and collaborative culture, the finance team recognizes that sharing its data is essential to unlocking the full potential of cloud computing.

Cloud platforms are specifically designed to automate routine accounting tasks, like crunching numbers and producing reports. These powerful analytical capabilities enable finance teams to develop more efficient workflows and see opportunities to outsource laborious tasks.

You should use your CRM platform to provide all departments a 360-degree view of the customer. By doing this, your finance department will also get more involved by providing your sales team with relevant financial information about each client. Your sales force will be better suited to negotiate deals with their customers and help your accounting department with collections since all relevant information will be directly available in the system.

3. Integration With Traditional ERP Systems

Finance teams depend on their existing ERP systems to manage core functionalities. These systems are often home base for detailed transaction ledgers that are spread across multiple disconnected sub-ledgers. Fortunately, finance teams don’t need to give up legacy ERP systems when migrating to the cloud. Cloud technology integrates with ERP systems to create a single source of truth for financial data and to eliminate duplication.

I am often asked by my customers what the right connection points between a CRM and ERP system are. One of the goals of accounting is to produce accurate financial statements. You do not need detailed invoice information to reach that goal. So if your billing system resides in your CRM platform, it is sufficient to push general ledger transactions into your accounting system, at an aggregate level, via a daily, weekly or monthly batch.

4. Regulatory Compliance

It can be a challenge to keep up with changes in the regulatory compliance landscape. Cloud technology solutions come pre-built with tools and best-practices workflows for streamlining and staying on top of these obligations. Furthermore, the developers of cloud-based platforms must adhere to strict International Organization for Standardization (ISO) standards that ensure data security. Finally, the move to the cloud is an opportunity to include finance considerations much earlier on in the company’s processes.

Make sure your clients have clearly established their performance obligations so that their CPQ system can take them into account. This often has a significant impact on how you configure your quoting tool, not only in terms of additions to the quote but also terms and conditions. This will allow you to have an opportunity to be involved much earlier and prepare for accurate revenue recognition regulations.

5. Scalability Needs

Finance teams spend considerable time planning and upgrading their systems to meet the growing needs of a business. The underlying challenge is that traditional accounting software and on-premise data storage do not scale effectively. By contrast, cloud-based platforms are fully scalable, and you can easily acquire more storage space when needed.

When I was a CFO, I manually brought recognized revenue into my general ledger once a month using client-server applications. The same principle was applied to the different modules from our ERP system. This solution was cumbersome and created financial records that were essentially for my team’s eyes only. As a business leader, it's important to sit down with members of your finance team and understand the magnitude of the financial records they are dealing with in order to give yourself a better understanding of your company's scalability needs.

Cloud technology truly is a business project that should involve all your teams. So make sure before you start your next one that you include your finance team from the get-go.

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