A Pathway to Greater Efficiency for Canadian Finance Leaders

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Earlier this year, the Bank of Canada noted an urgent need for the country to elevate its productivity levels. Improving productivity through efficiency, can allow our economy to grow faster and lessen the risk of inflation. Encouragingly, this is an achievable scenario.

The Canadian market is brimming with technology that can help companies work smarter, optimize workflows, and achieve their business goals. The adoption in innovation is particularly notable among finance leaders, who are keen to integrate new tools to improve efficiency. Here are some steps that Canadian companies can implement in their financial teams to enhance their performance.

Consolidation for efficiency

In recent years, finance teams have been inundated with an explosion of SaaS providers that have promised improved efficiency across finance functions. Unfortunately, this exponential increase in service providers has had the opposite effect, increasing complexity and ultimately slowing down decision making for businesses

While most companies require numerous systems to run their business, according to a recent Stripe report, finance leaders are struggling with the sheer number of software applications they need to manage on a daily basis. 63% of finance leaders said they are struggling with inefficiencies while using more than 10 different back-end systems, with the problem magnified in enterprise businesses where nearly one-quarter use over 50 different systems.

Two-thirds (67%) of Canadian senior business leaders describe the cost of software licenses and subscriptions as somewhat or very challenging, which is leading more companies to consolidate their software stack. As businesses continue to grapple with economic uncertainty, they should favour providers that allow them to centralise data and reporting, minimise human error, and close their books faster.

Automation with a human touch

Artificial intelligence (AI) is just one example of new technology many businesses have added to their arsenal, with 87 percent of Canadian organizations (compared to 72% globally) already piloting or using AI to automate their financial reporting process

Businesses are examining how they can improve efficiency by automating mundane everyday tasks. Finance teams are no different and there has been increased investment in digital technology to automate portions of finance operations. According to Stripe’s report, finance leaders will still place a heavy focus on human intervention and we can expect to see executives placing more time and emphasis on data analysis and strategic planning, building stronger internal partnerships between finance and business teams, and introducing new business models — all of which can have a significant impact on a business’s bottom line.

Businesses looking to free up time spent on manual tasks can start by identifying their biggest sources of manual effort, such as legacy systems and spreadsheets, and then select tools to automate a portion of these tasks. For example, businesses dealing with taxes across multiple markets can reduce complexity with tools like Stripe Tax that automatically calculate and collect goods and services tax (GST), harmonized sales tax (HST), and the other provincial taxes (PST and QST), freeing up a significant amount of time.

Fortifying against frauds and scams

The adoption of new technologies means fraud and scams have also become more advanced. According to a recent release from Statistics Canada, fraud cases in Canada have almost doubled over the past ten years, surging from 79,000 in 2012 to 150,000 in 2022.

As e-commerce fraud becomes more sophisticated, so too must fraud detection and prevention measures. In 2024, businesses need to take on a more strategic and multi-faceted approach to fraud prevention, and increase the investment put towards educating finance teams and the broader business about how to best detect and prevent fraud.

Again, making use of the right technology can make all the difference and online businesses can make use of e-commerce fraud detection products to monitor transactions for signs of fraud, such as unusual spending patterns.

For example, Skip The Dishes, Canada’s leading food-delivery network, saw massive growth across the industry which also made fraud and regulatory compliance more prevalent. The company implemented Stripe Radar, which uses machine learning to continuously adapt to shifting fraud patterns tailored to SkipTheDishes’ unique business. Since switching to Stripe, they have reduced chargeback costs by over 45% and provided their customers with a smoother checkout experience.

Looking ahead

While it’s hard to know how the second half of the year will shape up from an economic perspective, 2024 promises to be a pivotal year for finance teams. There is still time to revisit their technology strategy, identify areas where they can drive greater efficiency and build a foundation for a solid future.

This will set teams up for success, and allow them to grow revenue and reduce costs, which will be essential to weathering less than certain economic times.

Matthew Burlak is the Head of Canada GTM at Stripe.

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