19 Aug, 2020 | Blogs
Finance digital transformation has been talked about for years now, with many studies predicting digital transformation technologies to reshape how business is done. For instance, Deloitte had predicted 2020 to be the “breakout year” for massive changes in organizations adopting technologies such as Artificial Intelligence and Robotic Process Automation (RPA). While not all these predictions have come true, finance digital transformation has picked up pace due to uncertain business and geopolitical environments. In this article, we’ll look at what finance digital transformation means for finance and accounting departments, and the necessary skill set needed to thrive in this new and evolving landscape.
Quick Fact Check
Organizations of all sizes have started their finance digital transformation journey. According to a study from the IMA, at least one-third of the accounting teams are spending between 51% and 75% of their time on repetitive work. This indicates the immense potential of automation in the accounting department even though accountants are still slow to embrace change. But this behavior is slowly changing, with 56% of the respondents in the same study asking for automation to stay up with the increasing workloads.
The benefits of automation are plenty as people are still working inefficiently, particularly when it comes to managing financial close processes. With finance digital transformation, many accountants are adopting new skill sets in addition to honing their existing skills in Excel and spreadsheets. Organizations today work 24 hours a day, seven days a week, 365 days a year, requiring a mindset and approach that can tackle the constant flow of data and present findings in meaningful reports.
Automating Accounting Tasks
Software robots can not only free up humans to take on more strategic work, they also improve operational efficiency and costs. Financial leaders who are early adopters of RPA are leading the race of gaining expertise to make their company valuable in any future business process transformations. Some of the areas of finance digital transformation in accounting include:
- Accounts payable/receivable processing: Bots can streamline invoice processing by implementing digital workflows.
- Supplier onboarding: Bots can verify new suppliers’ details online before including them on the system without human intervention.
- Procurement: Procurement and purchasing are processes that are full of paperwork and unstructured data. Robots are ideally used in these processes to track price changes among several suppliers.
- Audits: Automating the audit process will help boost security by enabling a digital trail of when and by whom each file was worked upon. These digital files improve the accuracy and efficiency of auditors, making the audit 100% transparent and reliable.
- Monthly/quarterly close process: Software bots allow you to quickly get the numbers from multiple sources so that you can consolidate and reconcile them. It makes the entire process faster, accurate, and less stressful.
- Manage Expense: RPA can ensure you review and approve expenses in a compliant manner by reading receipts, auditing expenses, and alerting humans in cases of infractions.
- AI chatbots: Chatbots are deployed to address common questions from customers like the status on accounts, latest account balances, etc.
The key to finance digital transformation is allowing people and machines to work together so that each can contribute to areas they are proficient at. While machines can accurately and efficiently analyze data, humans can make strategic decisions and focus on exceptions. With machines taking care of the mind-numbing and monotonous tasks, accounting and financial professionals can take on projects they are better suited at.
The Payoff of Finance Digital Transformation
In the new normal, efficiency and speed with become the biggest assets of any organization. Whether technologies such as RPA will change our role is not even a question now, it’s a fact. It is time to proactively hone your skills and mindset to be better prepared for the future. Here are some of the roles that will be affected by finance digital transformation: CFO, Controller, Accounting Manager, and Staff Accountant.
Chief Financial Officer
CFOs were traditionally focused on the company’s finances, but today they have become greater strategic partners, with rising ownership of various levels of risk management. They can be classified as a data-driven “sponsor” for strategic business decisions in any organization.
The new Controllers will be increasingly using continuous processes for focusing on real-time, preventive controls and driving a balanced workload. The role will become cross-function that will include data-driven decisions and rule-based automation to make the close process efficient and faster.
To implement the CFO’s vision and effectively optimize technologies deployed by the Controller, accounting managers will have to focus on improving consistency and visibility and use reporting and analytics to proactively detect variances and exceptions.
Staff Accountants will be the ones who will be hands-on with new technologies to streamline processes, prepare reconciliations and gather data. The new-age staff accountants will apply their business acumen to become a strategic business partner and get the job done faster and more accurately.
The bottom line of finance digital transformation is that the focus will shift towards creating value, which will invariably result in employees feeling more valuable, engaged, and fulfilled. Start your finance digital transformation with Nuummite Consulting. Speak to our experts today!
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