Corporate finance departments have shown remarkable progress in recent years, according to a study by the consulting firm McKinsey. On the one hand, they have managed to reduce their costs by an average of 29%. And the companies that were at the forefront among the most efficient achieved an improvement almost equal to the others, which indicates that there is room for those that are further behind to continue improving. And an important detail, the leading finance departments in the study were able to spend 19% more time on value-added tasks-that is, tasks other than processing. -i.e., tasks other than transaction processing - than typical finance departments spent than typical finance departments spent in the past.

What can companies do differently to join the financial leaders? The McKinsey study points to four imperatives:

1. Build a broader network to generate new efficiency opportunities, beyond the transactional activities that have long been the main focus of attention.
2. Boost the role of finance departments in data management, either by consolidating, simplifying or controlling the flood of information flowing through the organization.
3. Strengthen decision making through the widespread adoption of data visualization techniques, advanced analytics and prescription elimination.
4. Reimagine the financial operating model to foster new skills and capabilities.

These steps are already enabling companies to join the elite finance functions, while reducing audit costs by double-digit percentages, improving data quality (and reducing unnecessary data cleansing efforts), enhancing the skills of finance teams, and enabling the function to better guide decision making within the organization. This, at a time when new technological tools, such as generative artificial intelligence, promise profound changes in business processes and management.

You can see the summary of the study at Transforming to the finance function of the future | McKinsey