Finance Transformation Best Practices for Creating Value and Reducing Costs

We’re all familiar with the mentality of “if it ain’t broke, don’t fix it.” But that thinking has kept outdated financial reporting systems and processes as “best practices” in finance for decades.

It seems the daunting task of knowing what financial data to collect, how to collect it, and how to turn it into usable insights continues to deter businesses from looking into finance transformation.

If you continue to stay with the older methods, your decision-making process lacks that of your more progressive competitors. The good news is that knowing you need a finance digital transformation is the first step to obtaining better insights.

How can you get started? Take your cue from others who’ve undergone a finance transformation and replaced outdated reporting systems to lower business costs and increase forecasting accuracy.

When done successfully, finance transformation creates value and reduces business operation costs. That’s because better information—like a more accurate projection of supply costs—leads to better strategic decisions.

When the insights gained from that information are used to improve processes, your finance department and business are more efficient. A more efficient finance team can then lower operational costs and raise business profitability.

A successful finance transformation empowers team members and reduces reliance on manual, outdated and low-value processes. Helping hundreds of customers over the years has shown us seven steps for full finance business transformation:

1. Integrate your ERP and FPM systems for scale in transaction processing and budgeting.
Creating efficiency in transaction processing and reporting means standardizing your enterprise resource planning (ERP) and financial performance management (FPM) systems.

A software integration better connects those systems for business growth. Without integration, while the ERP is processing back-office transaction information one way, the FPM is tracking the budget and forecast in another way which results in a lack of clarity and multiple versions of the truth.

2. Reduce reliance on spreadsheets for financial planning and reporting processes.
Excel is a powerful tool capable of doing everything from basic addition to complex calculations.

But Excel’s freeform nature isn’t ideal for developing deep connections between the business and Finance because it lacks collaboration and real-time communication tools and creates security and accuracy risks for plans and reports. A cloud-based FPM system can keep all your information on track and organized to save you time.

3. Streamline the annual budgeting process.
Budgeting shouldn’t involve late nights or be an untenable burden on the finance team—or the business. Streamline budgeting by using a cloud-based FPM system tailored to your needs.

Look for a system that automatically collects and validates the information you need and offers cross-team collaboration for faster budgeting so you don’t have to rely on out-of-date offline spreadsheets or manual data entry each period.

4. Implement rolling forecasts to update budget assumptions frequently.
A static budget is good for consistent, low-volatility businesses, which are few and far between.

Implementing a rolling forecast is more effective because it reflects new opportunities or risks that can better inform decisions and predict the future. In addition, rolling forecasts allow time for finance teams to continue to strengthen their business partnerships.

5. Use self-service reporting.
Finance departments often struggle with ad hoc analysis at the end of each period because gathering reporting data from each source—for example, Sales, Marketing, and IT—is a time-consuming task.

Empower management and save time by allowing all end-users to create their own formatted reports and mix and match those reports to uncover trends necessary to make decisions.

When the business is given the power to create reports through their own self-service reporting system, FP&A won’t have to respond repeatedly, which saves time for both parties.

6. Automate and accelerate financial close and reporting.
Traditionally, a finance team’s operating model was based on manually completing each task.

If you automate some business processes, such as line item categorizations, you improve the accuracy of reporting and data. During the financial close process, automation gives finance and accounting teams more time to analyze performance and provide the most accurate data for leadership.

7. Shift time from low to high-value activities
Finance teams that pivot to using traditional data metrics for analytics gain insights that drive future business decisions, like finding growth opportunities in underperforming areas of the business.

The typical finance metrics tracked by businesses—like vendor payments or total number of invoices—are data points that don’t add any business value. Switching to analytics-based solutions gives that data value because it takes individual data points and creates usable insights for decision making.

8. Use AI to free up time for more strategic work
AI in finance isn’t about replacing people; it’s about removing the repetitive tasks that slow them down. With AI-driven assistants, finance teams can automatically detect anomalies, pre-seed budget templates, and surface insights from complex datasets, eliminating hours of manual effort. That time can instead be used for high-impact activities like scenario planning, strategic analysis, and collaborating with other teams. The result: faster, more confident decision-making and a finance team that advises the entire business.

Successful finance transformation is easier if you know what challenges might arise and have finance transformation best practices for dealing with them. Though each finance transformation will vary, there are strategies for dealing with the common roadblocks.

1. Misalignment between stakeholders, business partners, and finance leaders.
Approach the situation from a communication-first perspective to make sure everyone feels heard and all parties can come to an agreement on what transformation should look like. Make sure everyone understands what are and aren’t the goals of the transformation—for example, saving money or updating technology.

2. Hesitant employees who aren’t ready for process changes.
Before you ever begin your finance transformation, institute a change management process that accounts for your employees’ current processes and their potential desire for things to stay the same. Make sure changes are made incrementally so employees have time to acclimate and master each change.

3. CFO falls behind on new technologies or finance processes.
It’s common for experienced employees to be hesitant to adapt to new technologies because busy schedules don’t often allow for continued learning. Keep up with the competition and maintain a high-performing team by utilizing finance department best practices for instituting a top-down learning culture.

One way to do this is by creating time each week or month to learn about new technologies as a team. Change can be difficult for any team, but the role of the CFO is to be open and informed about new technologies.

Many sales teams use new technology and high-quality materials to sell products and services. Marketing teams use the latest digital channels to maintain brand awareness.

So it’s no surprise high-performing back-office teams—like the finance department—use technology like Planful to give leadership the data they need to make better business decisions.

A successful finance transformation results in more accurate business forecasts and automation over manual labor. Planful’s budgeting and forecasting solutions give you time back from tedious manual processes and keep communication open with all departments thanks to prebuilt integrations and data export options.

Two Planful customers give perfect examples of companies making big strides on their finance transformation initiatives: Latham Pool Products and Room and Board.

In both cases, finance teams at these companies saw great benefits, including improved data quality, faster reporting, shorter budgeting and forecasting cycles, and the ability to do more work in less time.

Both companies had unique needs for finance process transformation but relied on technology to underpin the impact on their businesses. One key takeaway from both companies is that there’s no strict recipe regarding where an organization should start on its finance transformation program. It depends on the goals and objectives of the organization and where the initial pains may be.

For example, Latham Pool Products focused its initial transformation efforts on the financial consolidation and reporting process, then expanded into budgeting and management reporting in a later phase. Room and Board focused its initial efforts on budgeting and planning, then expanded into financial reporting.

• Integrating ERP and FPM systems eliminates data silos and delivers one version of financial truth.
  
• Rolling forecasts adapt to change faster than static budgets and unlock more strategic agility.
  
• Automating financial close frees time for analysis and ensures faster, more accurate reporting.

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Transform your financial planning, budgeting, and forecasting processes with Planful.

Explore our interactive demo to learn how.

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What does financial transformation really mean for today’s businesses, and why are so many finance leaders prioritizing it?

Financial transformation modernizes how Finance operates by replacing manual, spreadsheet-heavy processes with automated systems that deliver speed, accuracy, and control. It connects data across the business, streamlines workflows, and improves visibility, empowering finance teams to make faster, more informed decisions that drive performance and growth.

What are the pillars of successful finance transformation?

Successful finance transformations include ERP and FPM integration, reduced spreadsheet use, streamlined budgeting, rolling forecasts, self-service reporting, automated close, a shift to high-value analysis, and the use of AI to eliminate repetitive work and unlock strategic focus.

How does Planful AI support finance transformation?

Planful AI accelerates finance transformation by automating repetitive tasks, surfacing insights, and helping teams act faster. With AI-driven assistants built for finance, Planful helps eliminate manual work like anomaly detection, forecast seeding, and data validation—freeing up time for strategic planning and cross-functional collaboration. It’s AI designed to empower people, not replace them, and to deliver trusted insights with full transparency.