A 2020 Vision of the Future of Finance
“New year, new me” is the phrase we’re familiar hearing as people look to develop and evolve for the better. As the dawn of 2020 also marked the start of a new decade, this has felt more important than ever before. People are taking time to review the lessons they’ve learned since 2010, to inform their goals, ambitions, and strategy in the run-up to 2030. You only had to login to Facebook or Instagram on 1st January to see just how seriously people were taking it, #tenyearchallenge.
Given all the changes in technology, regulation, workplaces, and business in general, there’s no reason why accountants and finance teams shouldn’t be doing exactly the same. Life for the average accountant has changed exponentially over the last ten years. With the rapid pace of transformation set to continue, things are likely to look even more different by 2030.
While the pace at which things are evolving makes it incredibly hard to say exactly how things will look, we can be sure of what trends will help influence and shape those changes. To help accounting and finance professionals get a head start, we’ve done our due diligence, and recommend preparing for the following:
A shift to sustainability
Organizations are becoming increasingly cognizant that they need to be thinking about more than just shareholder returns, and how their operations impact the full range of stakeholders that give them “license to operate”. Larry Fink’s latest letter to CEOs and the recent statement by the Business Roundtable show just how serious big businesses are taking issues like climate change. Statements like these signify that the 2020s will see a resurgence in the notion that “being a good business is good for business. Finance teams will have a clear role to play in this shift to sustainability, from helping to ensure that strategic investments and partnerships meet these priorities; to moving away from paper towards digital processes.
Even more automation
Software that automates core accounting processes like the financial close has already been making waves. Trintech’s Adra Suite is able to reduce closes by three times; as well as producing more reliable outcomes on a more predictable timeline and streamlining workflows to optimize efficiency. Automation like this eliminates confusion and minimizes human errors, which is why more companies are embracing it. According to an ACCA Study, over 50% of C-level executives in the accounting industry expect further development of automated accounting systems. So those who aren’t already making use of automation definitely should.
Blockchain will continue to boom
This radical new approach, which uses a decentralized, distributed ledger to records the provenance of a digital asset (such as a money transfer) took off dramatically at the end of the last decade. Cryptocurrencies like Bitcoin and Ethereum boomed, while governments and central banks finally started investing billions. It’s only a matter of time before the average accountant needs to know how to make the most of it. Now is the time to get up to speed.
Moving more into the cloud
While cloud-based accounting services aren’t new, with nearly one-quarter of companies with more than $100 million in revenues still using spreadsheets, pen and paper to complete core close tasks, it’s clear there’s still room for improvement. As 67% of accountants say they believe that cloud technology can make their roles easier, and U.S. Accounting Today predicts that by 2020 the global market for accounting software will be worth $11.8 billion dollars – moving more into the cloud is inevitable. Savvy-finance professionals will be the ones who take the lead on that move, and by doing so advancing their roles as trusted, value-added advisors.
Offering strategic business advice
The role of the finance team is shifting from simply crunching numbers to providing the Chief Financial Officer (CFO) with everything they need to offer strategic business advice. According to McKinsey, the average CFO now has at least six non-finance department heads reporting into them; showing how their role is becoming far more well-rounded, strategic and, no doubt, challenging. Those who want to cement their position as the CFO’s right-hand man or woman need to start behaving like business advisors to support them in this shift. As the wider economic and political landscape continues to fluctuate, the professionals who become proactive agents of change and growth will be the ones who succeed.
Harnessing data analytics
Being able to access and analyze a bigger, broader range of data from across the business will be the key to surfacing new insights to become more of a business adviser. There are three things that must be kept in mind in order to do so successfully. First, finance professionals will need to build a stronger relationship with IT to ensure that secondly, they can tap into the business intelligence and data analytics platforms to help turbocharge this process. According to the Business-Higher Education Forum, 59% of finance and accounting professionals say that by 2020, data science and analytics skills be required in the industry. So, third on the list is upskilling in these areas.