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In global organizations, the role of finance departments has long ago expanded beyond traditional accounting and administrative functions. Viewed as a profit center rather than a cost, the company's CFO and the finance department play a strategic role in mergers and acquisitions, acquiring and lending capital, as well as assisting with the board's decision-making.
The new capacity of the finance teams in a modern business environment has created novel challenges that call for advanced capabilities for financial operations efficiency and compliance management. Below, we discuss the challenges in traditional finance operations and how technology is critical for supporting finance teams in their new roles.
Despite their expanded scope of responsibilities, many finance departments still practice legacy approaches, lack collaboration with legal, accounting and compliance teams and utilize manual processes for retrieving and updating data and documents.
Challenges Faced by Finance Teams in M&A Transactions
In the M&A context, financial departments are instrumental in both acquisitions and divestments. While the CFO and the finance team are active participants at all stages of the M&A process, their role becomes critical for fulfilling due diligence on targets as well as ensuring the deal readiness of their organizations.
As modern due diligence relies on thousands of data points that can be fed into AI-based financial models for evaluation, finance teams heavily depend on corporate data to fulfill their functions. However, when the necessary data are distributed across multiple siloed databases, the processes become stalled, resulting in inflated costs of due diligence and subpar analytics.
The Dependency on Data for Assisting the Board with Decision-Making
In supporting key stakeholders in their decision-making, the CFO and finance department become strategic partners to the CEO and the board, reporting on the financial situation, providing simulations of profitability and risks and delivering strategic insights. In implementing this function, the finance teams need access to accurate and updated records encompassing thousands of data points across jurisdictions and ecosystems. When data governance is not automated, finance teams have to rely on manual processes, which can lead to errors, lost opportunities and risks of non-compliance.
Lack of Collaboration
In global organizations, finance departments need to collaborate with other teams, including the legal departments, legal ops, accounting, auditing and others, becoming a global partner for all company stakeholders. That said, when different teams use disintegrated apps and repositories for their data, collaboration often falls short of its objectives due to parallel processes, data bottlenecks, and inconsistent records.
The importance of technology for global organizations in general and finance departments in particular cannot be overestimated. Modern finance operations thrive on data throughout its lifecycle, including capturing corporate and financial records, data upkeep and maintenance, as well as updating, sharing, and analyzing. Meanwhile, with the number of entities and data points constantly increasing, finance teams need modern technology to leverage inflated volumes of data and improve collaboration.
At present, many finance departments use multiple cloud solutions as repositories for their data, files and financial reporting. At the same time, many of these solutions do not have the capabilities to generate reports, auto-populate data into templates, or automatically update all relevant records across all ecosystems after changing any of the datasets.
The availability of modern technology solutions is critical for ensuring financial operations efficiency and collaboration with other departments and legal entities. Such tools as entity management software and legal tech for finance enable teams to stay on top of their data, deliver timely financial reporting and analytics, ensure deal readiness, speed up due diligence and add value to their organizations.
Among other technologies, entity management software is an essential element of finance teams' tech stacks, providing core functionality essential for all finance operations. In particular, legal tech for finance allows the teams to validate essential data for each legal entity, including:
When financial departments leverage capabilities of effective entity management tools, they can save countless hours by automating their reporting through auto-populated customizable templates. The finance teams can effectively collaborate with other departments, working on the same platform, serving as a central database for all corporate records with instant access from any device.
Entity management software helps teams ensure financial compliance management by enhancing the quality of data and streamlining financial reporting. Empowered by automation, financial teams can speed up due diligence and ensure deal readiness for mergers and acquisitions, leveraging corporate data as a strategic asset.
When financial teams leverage capabilities of entity management software, they can automate their compliance processes, keep all compliance-related documentation on a single cloud-based platform and effectively track compliance deadlines. Having a centralized database for all corporate records, the teams can maintain and keep all entities in good standing and ensure financial, legal and tax compliance at all times.
By having entity management software in place, finance teams can implement effective data governance by standardizing the processes of data input, storage, sharing, access, disposal and filing. Supported by attribute-based access control and audit trails, the teams can effectively control governance and compliance in finance, legal, tax and other areas across the board.
Operating in a fast-paced environment, finance teams need effective compliance technology solutions to add value to their organizations by assisting the board with strategic decision-making, streamlining M&A transactions and ensuring compliance. Entity management software can become a game changer for modern business organizations by enabling governance and compliance in finance, effective financial data management and legal and financial integration. Please do not hesitate to contact the Athennian team for a free demo to learn more and explore capabilities of entity management software for financial operations efficiency.
"Very easy to use, modern interface, excellent support. Athennian has an amazing conversion team. They helped us migrate all of our data and the training was very good."
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“When we were reviewing other entity management systems on the market, in some cases, we were not comparing apples to apples. But with Athennian, there was really no comparison. The paralegals were so excited to come on board.”
"There are so many things I like about this program, but the one thing that really stands out is the user friendly interface. The program is fast and allows me to enter corporate information very quickly and efficiently. I would also like to note that Athennian provides the most the fantastic customer service."
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