The answer to a CFO’s dilemma lies in more automation — finance automation and robotic process automation — and less steam-driven processes like steam spreadsheets and manual approaches to back-office accounting and finance operations.
Technology is changing the way business is done throughout the organisation– from agile product development to digital marketing. It is time for accounting and finance to have their moment in the sun. Failing to automate the financial close leaves companies at a competitive disadvantage.
Todd Hunt, vice-president and general manager, APAC, BlackLine, and someone who is very knowledgeable in finance controls and automation platforms has penned a broader industry piece that makes good reading for CFOs. His words follow.
By 2020, Accenture predicts that finance productivity will increase by two to three times, and organisational costs will decline by 40% thanks to automation. They also foresee a dramatic shift in time spent on analysis, from 25% today to 75% in the future.
An automated accounting landscape significantly changes the role of the accountant – but not in the way you may think. Many are concerned that technology will eliminate jobs, while in fact, it will eliminate the most time-consuming, manual processes that prevent accountants from delivering the strategy and analysis that drew them to this profession in the first place.
It takes nine days, on average, for most finance and accounting organisations to close, consolidate and report the financial data, according to the Hackett Group. Top performing companies take five days for the same processes, due to their detailed closing calendars, policies and procedures, and tight adherence to key performance measures used to track the efficiency of the account-to-report process.
Leveraging technology not only improves the efficiency that accountants need to deliver insightful intelligence, but it creates real-time access to financial data so that reporting and analysis can be done continuously. This provides the relevant, timely data executives need to inform business decisions and develop strategy, along with full confidence in the numbers. It really is the only way forward, especially with increasingly complex regulatory guidelines and ongoing changes to local statutory reporting.
Robotic Process Automation (RPA) will not replace accountants, but evolve their role and augment their effectiveness through automation. It is a progressive, positive, and necessary shift that is creating the digital workspace for accounting and finance professionals to focus on the greatest value they can provide to their organisation.
Further migration to the cloud
Process standardisation through the cloud may be the single most important element for CFOs to put into action. The agility, dynamism and standardisation of cloud-based applications give companies the means to continually innovate, a competitive necessity in a business world that is constantly changing.
There’s a compounding need to centralise and standardise rules and information across all company locations, to end the struggle with spreadsheets, and create time and efficiency through automated workflows, centralised task lists, and tracked approval and review processes. This is especially true for global companies, and the cloud can enable standardisation across multiple geographies while circumventing the typical costs of a regional implementation.
The most cost-effective way to automate the error-prone, manual tasks that are known for exhausting resources is through the cloud. It has the ability to roll out new systems and standardised procedures with agility and ease, empowering accounting professionals with the new speed of delivery.
Streamlining procedures through the cloud act as a springboard to greater automation and process innovation. Efficiency gains from this streamlining allow time to be reallocated to continuous process improvement and strategic initiatives.
The cloud has created a bright spot in the future of finance. It contains what CFOs need to realise their vision and exceed the C-Suite’s expectations. It provides what accounting and finance professionals need to become modern finance leaders. For companies that embrace the innovation, automation, and standardisation the cloud has to offer, the sky is the limit.
Businesses use data generated and verified by accounting staff to know how they are performing, to manage operations, and to make key business decisions. With the accelerating pace of business today, accurate, up-to-date data is more essential than ever. CAOs, Controllers and Finance chiefs need operational and performance data to know how their departments are performing. These insights further assist their ability to efficiently manage operations and enable data-driven decision-making.
Visibility is even more critical when it comes to the financial close, to enable accountants to deliver process-optimising financial data that is still relevant to the company’s future, instead of creating a picture of the past. But with most accounting tasks still performed using spreadsheets and through manual processes, this simply isn’t happening.
It is imperative for companies to modernise their Accounting functions to remain competitive. This begins by eliminating manual processes and digitising operations. Once done, accounting and finance executives need access to performance data to improve their processes. They must be able to benchmark this data against peers to understand how they are doing by exposing areas of weakness. With this insight, they can make meaningful changes that will benefit the broader business.
When accounting operations are modernised, it not only makes processes more efficient, it also provides the real-time data that business leaders need to remain competitive in a rapidly changing world. This level of actionable intelligence elevates the CFO and the finance team from a cost centre to a value-adding strategic leader.
More companies will adopt continuous accounting
In today’s highly complex global business environment, companies are constantly expected to do more with less, to run leaner while becoming more effective than ever. This is especially true for accounting and finance. They are now required to not only deliver periodic financial data and reports but also real-time analysis and intelligence.
To meet mounting demands, finance is shifting from traditional, rigid, and manual accounting processes to more automated, flexible, and agile operations. This shift is essential because it provides the productivity benefits that free organisations to deepen their focus on analysing and reporting financial performance.
Enter Continuous Accounting. This new approach distributes the workload evenly over the accounting period, allowing accountants to process data and transactions as they come in. It embeds automation, control and period-end tasks within daily activities that align the accounting schedule with the rest of business. It shortens the close, smooths out the end of period spikes and produces real-time reporting, analysis, and awareness.
Accountants can schedule, on a daily basis, the demanding workload that piles up at the end of the month, quarter and/or year to close the books. Accountants can now attend to the tasks at virtually the speed at which the business’s transactions occur. The financial close process becomes a daily task-by-task operation, reducing accountant stress, the risk of administrative and reporting errors, and the possibility of a material weakness.
Continuous Accounting also offers a way for companies to more quickly understand how the business is performing – a boon to the financial planning and analysis staff and internal auditors. The process further provides the raw material, through predictive data analytics, that a CFO can use to evaluate the efficiency of the accounting and finance organisation.
Continuous Accounting fosters continuous improvement by forging a mindset to embed financial closing tasks in each day’s workload and to use automated technology to manage this process and measure its efficiency.