Technology is transforming Finance and Accounting. Yes, we have been hearing about this for ages, and now it is truly happening.
Earlier this year, Accenture found that the rate of automation for transactional accounting processes has skyrocketed from 34% in 2018 to 60% in 2021. This is truly revolutionary! Not only is the shift finally happening, but it is happening at breathtaking speed.
As it often happens with technological development, we overestimate the short-term impact and underestimate the long-term impact. When someone gets an idea about what is possible and proves it at a small scale, it always takes a while before it happens at large scale. However, many begin talking about it as as soon as the small scale success is proven.
Now, it is safe to say that the technology-enabled accounting team of the future has arrived. Let us examine what that means and start discussing how to make it happen for your finance function.
Modern Accounting Revealed
It’s time to move to modern accounting, which is characterized as unified, automated, and continuous:
Unified. Simple and standard processes that can be applied at a global scale and are easy to understand. This unlocks global visibility and at same time, integrates all your disparate systems and the data that goes with them.
Automated. This is where the shift is happening at lightening speed right now. Automation helps to free up time for higher value-adding activities and lets you focus on what matters most to your business.
Continuous. This is the next shift that we should all expect to happen soon. Rather than the traditional month-end, we will see the dawn of Continuous Accounting. Close with the click of a button at any time, giving you access to real-time information and powerful analysis options.
The key lies in process standardization and simplification. Why is this the most important aspect? Automation will pull us further and further away from doing the processes ourselves. This puts us at risk of losing a vital business understanding.
Processes need to be simple and intuitive to understand so we can always process-mine to determine what and why something has happened in our business. Otherwise, we will be left as “clueless ice skaters” that are unable to go below the surface of our business and understand what happens when something unexpected takes place. Automation is essential, but if you don’t understand the processes you are automating, you risk putting your whole business at stake.
That said, there are many advantages of modernizing your accounting team. Just consider what Coca Cola, a truly global company, was able to achieve. They were facing inconsistent processes around the world and dealing with 50,000 GL accounts. This made it impossible to do proper follow up and control, and as a result, visibility into the numbers was limited.
Here are the results they have achieved by making the move to modern accounting:
A tangible FTE reduction of 55% in terms of people working on reconciliations
Global visibility across entities in 200 countries
A boost in efficiency, increased consistency, and true global scale
A much stronger control environment that helped minimize unwanted risks
These are the kind of results that can transform any accounting and finance organisation.
What Could You Do with a 55% Efficiency Gain?
We are no longer talking about small incremental improvements. The change happening in Accounting today is radical. Just consider what you could do with the 55% efficiency gain that Coca Cola experienced.
The natural step to many senior finance leaders would be to reap the efficiency gains and simply minimize the cost of Finance. But this isn’t the right next step.
Instead, we should invest in our finance and accounting teams, giving them opportunities to upskill and perform higher value-adding activities. Business leaders are screaming for insights that can help them make better decisions. Those insights should come from the technology-enabled accounting team.
However, according to Accenture, today only 20% of finance teams use operational or macroeconomic data as part of their analysis. That’s already a clear next step to take: expand from simply looking at financial data.
Further, less than half of CFOs use advanced financial modeling in their insight generation. It is, of course, a pre-requisite to use operational and macroeconomic data with sense. This is where the technology-enabled accounting team can excel. They identify new value and provide new depths of insights, whereas the traditional accounting team is mostly focused on the efficiencies and improved reporting accuracies.
The opportunity is significant. Modern accounting can deliver the resources needed to super-charge the technology-enabled accounting team to drive value creation at a level never seen before.
Start enabling your accounting team with next-level technology today and ride the automation wave into the era of modern accounting.
Read this white paper to discover the results from FSN’s global survey, which focus on the wide-raging effect of the pandemic—both short and long-term—and an accelerated drive for automation.