IT and Finance – How Do They Work Together
IT tools have become the driving force of the financial system. They are an essential tool for modern businesses as well as individuals who want to establish a better control and management of their finances. Accounting software, various analytical tools, data management programmes and day trading software are only a few of many IT finance systems that made it a lot easier for businesses and individuals to manage their finances, identify the biggest expenditures and take proper steps to improve their financial situation at the same time. Thanks to IT, a financial task that used to take hours and a professional is today automatically generated by the software programme in a matter of seconds.
Due to the many benefits of IT for financial operations, it has become impossible to find a finance director who does not use IT tools. Besides enabling finance directors to manage the financial risks, financial planning and data analysis, IT systems also provide them with an essential tool in their new role as strategic partners and advisers of managing directors as well as in their role in development of their company’s strategy. And since the need for effective financial management increased after the year 2008, various IT tools and financial systems have become even more integrated with each other. But besides reducing costs and increasing efficiency of financial management, the use of IT systems also brigs certain risks such as potential data insecurity which requires a special attention. At the same time, not all IT tools are equally reliable and efficient.
While the selection of a quality IT system (or multiple ones) and taking extra precautions in regard to data security is crucial to achieve the desired effect, the efficiency of the IT tools also depends greatly on correct use. Even if the company has the most up-to-date tools and the best people in the finance department, the IT tools will not only be of little worth but may even ruin the firm’s finances if they are not used correctly. As a result, there are companies as well as individuals who are reluctant to adopt new or upgrade the existing IT systems which, however, prevents them from making the most of the technology available and keep in step with time as well as with their competition.
The risks of IT tools and in the first place, of incorrect use can be reduced dramatically by close collaboration of the financial and IT departments as well as by running layer3 test programmes to allow the personnel to get familiar with the system and determine the system’s and their own weaknesses. Before the adoption of the system, the staff should go through rigorous training in order to make it operational in the first place as well as to reduce the risk of potentially costly errors that can occur if the person does not know how to use it correctly.