3 ways finance & credit leaders can avoid risk in 2017

As the complexity of globalization increases, CEOs and business leaders are increasingly looking to their finance and credit teams for information and insight into how to run the business.

From the liquidity and stability of the firm to which products, partnerships, or acquisitions would best benefit the business—the finance team has access to a wealth of data that can help guide the organization.

The contrast between the increase in expectations for these teams and the decrease in budget has been one of the top challenges cited by credit and finance leaders over the past few years. Additionally, the amount of data that these teams manage is multiplying every day.

3 ways finance and credit leaders can avoid risk in 2017

The decisions that finance and credit teams make over the next few years in terms of their internal processes, data management, and technology investments will determine how successfully they’ll be able to differentiate themselves in a competitive market.

To do so, here are 3 ways that finance and credit leaders can prepare for the future of credit management in 2017 and beyond:

1. Planning for the Unknown Near-Future amid Economic Uncertainty

The beginning of 2017 is best characterized by the ever-present global economic uncertainty. From the shockwaves coming off the 2016 Brexit vote to the results of the U.S. presidential election, the finance and credit teams are grappling with an unpredictable market. However, there is reason for businesses to be optimistic. According to Allison Nathan, of Goldman Sachs Research, many investors are preparing for the prospect of “reflation” in 2017.

The expectations are that the recent presidential election, specifically the Trump administration’s platform of increased business protection, have made many investors optimistic about fiscal stimulus. “The key question for investors at this point is how long this reflationary theme can continue,” says Nathan, “In order for equities to continue to perform alongside higher inflation and higher rates, we will need to see better economic growth.”

2. Shifting to a Growth Mindset by Collaborating with Sales

Despite decreasing budgets, finance and credit teams are taking on more responsibilities than ever before. Over 75 percent of finance executives stated in the survey that they consider supporting their organization’s growth and innovation their top priority. As technology, such as automation, makes it easier for lean teams to offset manual tasks, credit teams have more time and resources available to work on strategic initiatives.

Collaborating with sales is one way that credit teams can steer the company toward partnerships that will lead to more business and less bad debt. In a survey by Credit Today, 34 percent of credit and finance professionals said that working more closely with sales was a top priority. For this to happen, many finance professionals recognize that they need to rethink their systems and processes. According to CFO Magazine, the majority — 87 percent — of CFOs say that they need a more agile way to analyze financial and performance data to meet growth targets.

3. Increasing Internal Collaboration and Transparency

Savvy finance and credit teams aren’t just looking to collaborate with sales to drive growth, they also want to be more aligned with marketing and other growth-oriented departments. Recent data from Neustar shows that 78 percent of executives say that marketing and finance alignment is critical, but few companies show signs of alignment.

This misalignment is largely due to a culture of gatekeeping, where much of the data that finance teams create isn’t designed to be shared more transparently across the organization. In Dun & Bradstreet’s 2016 Enterprise Analytics Study, it was discovered that only 38 percent of companies share the results of their analytic insights outside their departments.

When data is stored across multiple systems it becomes difficult to access and analyze. To avoid becoming a data bottleneck, finance and credit teams need to centralize their company’s data in one master structure. A master data structure is the first step to creating a data-inspired culture and increasing collaboration between sales, marketing and the finance team. When these teams can share insights and analyses, the company benefits from smarter, more sustainable growth.

Organizations are relying on their credit and finance teams to help them navigate today’s unpredictable global economy. They have a unique opportunity to innovate and spur growth within their organizations by shifting to more collaborative, transparent, and leaner processes. In doing so, they can help their companies avoid bad debt and make business decisions that will lead to strong, sustainable growth.

Source: Megan Van Vleck | D&B

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