Improving Finance Functions to Drive Business Operation

8:31:24 AM | 9/23/2021

The role of accountants and financial professionals has evolved beyond tactical applications. More so during this pandemic, where the financial stability and performance of many organizations are severely tested. As planning, forecasting and scenario analysis become increasingly relevant in all aspects of business decisions, many finance teams across Southeast Asia (SEA) have gained a seat at the leadership table.

However, in the recent report 'Finance functions: Seizing opportunities - A Southeast Asia perspective’ jointly conducted by the Association of Chartered Certified Accounts (ACCA) and PwC, only one in three respondents believe this current elevated status will last. Finance functions should capitalize on the progress made and develop an even stronger relevance by helping their organizations define business strategy and direction.

Promoting best ESG practice

There is an underlying force for societal and business issues to come together and transform how organizations operate. Governments’ ambitious, top-down commitment to reach net zero target is increasingly backed by international agreements, national-wide programs and upcoming regulations. In addition, COVID-19 has heightened the public interest in many issues of Environmental, Social and Governance (ESG) including employees welfare and equality in the workplace. Interestingly, findings in this report highlight that finance functions can no longer focus on profit maximization only. Instead, businesses must acknowledge and address sustainability issues.

Stakeholders today are demanding greater transparency on non-financial data disclosure. Finance teams have an important role to play in explaining the organization’s journey. Since ESG is becoming an integral part of it, the function should reimagine reporting with sustainability-based insights which can support strategic and operational decision-making, as well as foster the right control mindset over these issues.

In the context of Vietnam, Nguyen Hoang Nam who leads the Assurance ESG practice of PwC Vietnam, said: “ESG principles are fast becoming business imperatives. Today, ESG is increasingly being built into the core of an organization - from its reflection in the purpose and mission of a business to being a key topic in stakeholder engagement. It is time for organizations in both public and private sectors to take a proactive approach in their ESG adoption journey. The current initiatives in Vietnam such as Annual Sustainability Report Award or Vietnam Sustainability Index are well recognized for promoting the best ESG practices among public listed entities. This should also extend to a wider group of businesses in Vietnam to bring more value to the entities themselves and the community.  Along this journey, I strongly believe the finance function will play a vital role in how businesses build, measure, track and disclose their ESG metrics and reporting.”

Accelerating technology adoption into the finance functions

Another opportunity to strengthen relevancy lies in digital transformation. According to the report, respondents in SEA have a relatively stronger expectation in pursuing digital capabilities compared to their global counterparts. Many surveyed CFOs in this region agree that emerging technologies such as cloud technology, automation and artificial intelligence will not only help generate sharper insights to support better and faster decision-making - it can also reduce costs.

For finance to use predictive analytics to look ahead, the report also highlights that finance teams often lack a data-centric approach to driving meaningful insights and the different mix of skills needed to deliver them. They need to be able to draw relevant business insights from a large volume of data for decision makers and have the confidence to challenge the leadership team based on their analysis.

Sreenidhi Thubanakere, Director, Management Consulting of PwC Consulting Vietnam, further commented: “It is not all about the technology. People and Process are also enablers that allow the finance function to move toward digitalization. Organizations must empower their people with training and upskilling programs. While having your organization’s culture, goals and appetite for change in mind, redesign your process in a way that creates value and encourages collaboration across the business.”

Source: Vietnam Business Forum