Technology has received huge impetus with respect to financial transactions in recent years in our country. Demonetisation, Encouragement of Digital payments through UPI, IMPS etc, has motivated every individual to depend more and more on Technology products for carrying out their various transactions. Irrespective of the extent of education levels of the person, most people have learnt to use internet banking, mobile banking etc for their everyday transactions.
On the other hand, Technology has also proved extremely important in managing finances. Today youngsters depend on various Apps for managing their funds, organisations use various intricate softwares for data mining and drawing inferences and conclusions on the basis of the input of data.
Human mind has a limitation to the extent and accuracy of processing and accessing huge volumes of data, however with the use of technology a data warehouse can be created which helps to make various permutations and combinations, helps management in taking decisions, helps organisation in cost cutting, enables top management to identify loss making departments, helps in generation of reports, presentation of facts and figures and so on and so forth. These kinds of data mining and processing of information is impossible with manual and physical maintenance of financial data.
In the olden days, the finance department had to first pass entries on a journal, then transfer them to ledgers and then draw up the profit and loss account and the balance sheet however with the advent of technological softwares a single debit or a credit entry will automatically pass relevant adjusting entries and tally the Balance sheet and complete the interim transactions in between. Many finance clerks are today selected by corporates depending on their awareness of these technological products and their expertise in them. Various certificate courses are available in the market and these help job seekers in having a definite edge over other aspirants.
Technology helps not just corporate finance, it also helps NGO’s and other Not for Profit organisations in organising and managing finance. It also helps organisation in having a systematic approach in managing funds and helps to avoid and detect frauds. Reduction of errors and ensuring accuracy of data is another noted feature with the use of technology.
Few things that the user has to be careful in technology based financial management is that first and foremost the output of data depends on the quality and accuracy of the input of data, today systems are not intelligent enough to guess wrong input and a correct input, even though a certain portion of input can be checked through parameterisation and assignment of higher end and lower end values. Another important factor that the inferrer has to be careful is with respect to the final output which could sometimes be misleading, depending on the extent of data entered. Smaller sample sizes could make the inferrer to make an immediate result based decision which need not necessarily be right. A certain subjective aspect is always to be considered along with the technical reports generated by the system.
Core finance based organisations such as banks and insurance companies use truckload of financial data, backed up in various mainframe servers saved in various different strategic secret locations in ensuring secrecy and safety of information. This has made these companies more efficient and capable of handling millions of transactions without much hassle while ensuring customer delight in carrying out their various transactions.
At a macro level, technology has helped countries in more carefully deciphering their GDP growth, analysing their inflation levels etc and taking strategically important decisions that have helped countries to develop more systematically at a faster pace.
Summing up, technology in Financial management has taken financial management to a whole new level and made impossible things possible. However as mentioned above, accuracy and extent of data, knowledge and fluency in the use of softwares and hardwares and the required influx of subjective information will enable the decision maker to make rational, strategic decisions that could be the game changer for the organisation in the competitive world that lies ahead.
– Rayner H Ephraim