The Office of Finance was continually tested throughout 2020, especially in areas related to agility, flexibility and crisis responses. However, finance teams that relied on manual processes and spreadsheets found it even harder to cope and respond to the demands of the pandemic while providing what their organization required, especially in terms of timely insights and reliable reporting. The future of finance was accelerated, as many organizations began to embrace and leverage new technologies including finance automation, robotic process automation (RPA) and artificial intelligence (AI).
As organizations navigate financial planning for 2021, it is important to identify the key insights that the pandemic uncovered for finance and accounting during 2020, as well as the impact they made on the future of finance going forward.
COVID Challenged the Status Quo of Typical Accounting Tools…
The quick transition to remote work for the global workforce revealed tremendous gaps in current business process technology, especially for finance and accounting. Though many F&A professionals were aware of spreadsheet weaknesses, these were manageable when collaborating together in a traditional office setting. However, when employees began working from home, the weaknesses were exponentially magnified, and the Office of Finance needed new tools to adapt.
…Causing Accelerated Adoption of Finance Function Automation and RPA
Due to this shift, there was a significant surge in automation and RPA implementation across the globe to support remote workforces and address cost-cutting pressures. A study conducted by Forrester Consulting in May found that organizations implemented more digital transformation initiatives in the first five months of 2020 than had ever been implemented in the previous five years before.
But remote work and cost-cutting weren’t the only reasons that the automation of accounting processes increased.
The Role of Finance Has Expanded…
In times of crisis, the voice of the CFO becomes more important than ever to reassure and guide stakeholders, internal employees and organizational leadership. Another recent study revealed that 45% of executives said the influence of the finance function for the organization had grown throughout 2020.
The responsibility of this major organizational influence not only falls on the shoulders of CFOs and Controllers, but also the teams they manage to deliver results. In addition to meeting regular close deadlines and managing the financial reporting, finance and accounting teams are now required to fulfill other duties such as:
- Driving strategy for long-term value
- Tracking relevant KPIs and providing insights
- Managing and adjusting cash liquidity
…Prompting Finance Executives to Evaluate Smarter Approaches
This expanded role has forced the Office of Finance to work smarter by re-evaluating the initiatives that are effective, as well as those that aren’t— another reason why CFOs have increasingly turned to digital technology investments. A PwC study found that 56% of the surveyed CFOs believe that the technology investments they made during the pandemic will push their organization to be better in the long-term. The study’s findings emphasized that companies that have adapted their business models and innovated to drive a strong top line this year will be the companies that succeed.
For finance and accounting, the importance of investing now for the future of finance is crucial. Financial transformation and robotic process automation in accounting are key components to drive efficiency and effectiveness, as well as enabling these teams to meet the demands of their new roles.
The Future of Finance Has Rapidly Evolved…
What exactly will this future look like?
The pandemic has made access to real-time information non-negotiable. But managing the complex intake and recording of information has long been a time-consuming task, limiting the ability for finance professionals to more readily participate in forward-facing activities such as forecasting and data analytics.
Traditional manual approaches to managing the financial close cycle have driven up costs, increased the risk of errors and delayed access to critical financial data. Rather than maintaining the status quo, companies that want to maintain more timely financial insights must replace the traditional Record to Report process and embrace a new approach. Automation of accounting processes eliminates the time that would be spent double-checking data and performing tasks such as reconciliations and significantly frees up time to step away from processes that routinely create bottlenecks. With this newfound time, finance and accounting can collaborate across the business at a much higher level, providing consistent, accurate and timely data with the strategic insights and the desired value that organizational stakeholders crave.
Artificial intelligence, automation and RPA in the finance function are the tools that are allowing the Office of Finance to modernize financial processes.
…and 2021 Finance Priorities Reflect These Changes
Moving forward, CFOs and finance executives are keeping the future of accounting in mind as they begin financial planning initiatives. A Protiviti report discovered that, among the top ten finance priorities executives are focused on, some of the most prominent are:
- Enhanced data analytics
- Process improvement
- Internal controls
- Strategic planning
Over 70% of executives ranked these activities highly on their priority list. The key to nearly all these is the automation of financial processes. Automation and RPA strengthens controls, continuously works to improve all processes (both individually as well as the holistic Record to Report), provides real-time and accurate data analytics, and leaves finance executives and CFOs enough time to participate in strategic planning.
The future of finance is quickly evolving, and financial transformation is the key to success in this new world. Explore the ROI of finance automation, artificial intelligence and robotic process automation for the Office of Finance and the entire organization. Don’t delay— the same methods that worked before are no longer sufficient to retain your organization’s competitive edge in this new world.
Written by: Ashton Mathai