“We see a definite trend, from automated tools that increase efficiency and support the process of planning, through more transparent workflows, and toward finance using these tools for predictive modeling and improved analytics,” Iervolino says. Part 2, What’s on Your Transformation Risk Checklist? They’ve shifted to (using) cloud accounting and finance workflow management tools, where manual processes remain for exceptions only. Our Future of Finance and Accounting blog series is designed to prepare finance teams at midsize companies and nonprofit organizations for changes in regulations, best practices, and technologies that will impact finance and accounting … In addition to evolving leadership models, new and diverse teaming templates will also emerge, with groups including experts in robotics, blockchain, and cognitive technologies. The result: a shift from finance as a “function” to that of a factory, conducting touchless and seamless transactions. “This is unfortunate because functionally excellent companies are where things get really cool. Most important, they are giving all-sized companies the tools to more effectively align their financial strategy with their business strategy. 2020 AICPA Meeting: SEC and PCAOB Developments. This is not Modern Finance. “Cloud-based reconciliation tools have enhanced efficiency and improved visibility into workflows across the business,” he says. Accountants can search through the details of account balances across all balance sheet accounts, explore any discrepancies that pop up, and then make the required corrections. He or she has become so vital to their companies’ corporate performance management (CPM) that Gartner recently split its tracking of CPM into two areas – strategic CPM and finance CPM. The chatbot will query various databases and large datasets—both structured, unstructured—and relay the findings to visualization software to create a dashboard illustrating the query results. Since users have visibility into the progress of all processes involved in the financial close, the ability to validate the accuracy of the data is vastly enhanced. … The future of finance and accounting will include an ever-increasing adoption of technology not only to do things better, faster, and cheaper, but to radically change the value F&A … “The models will help identify opportunities for improvement in finance and accounting workflows, which in turn will help staff become more productive for strategic purposes.”. The finance function has a mandate to go beyond its core accounting role, as described by senior finance executives in this future of finance research paper. To borrow a sports analogy, it’s the difference between being a scorekeeper and a coach. By Hugh Scantlebury, co-founder and CEO at Aqilla For every forward-thinking business, financial and accounting excellence has become central to understanding performance in real time, maximising opportunities and predicting risk. “No longer will accountants have to deal with inexact numbers, which drives them nuts,” Sommer says. Technology won’t take your job, but it will change it. Instead, we see these technologies offering the opportunity to change the role of finance… This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. When they do, finance and accounting will learn where they are ahead of the eight ball or behind it, process-wise. “You’re less likely to be audited, and if you are audited it’s less likely to cost you.”, Iervolino agrees: “Assuming visibility into the financial data, companies can expect definite enhancements from an auditability standpoint.”. This is Modern Finance “now.” What is “new” and “next” is paradigm busting. This is undoubtedly good news to many accountants stuck in the trenches performing manual tasks like account reconciliations, transaction matching and variance analyses. What is coming down the pike – the application of Big Data and analytics to financial data – promises the greatest change in finance and accounting in its history, upending the role of the CFO and his or her staff to navigate the business going forward. Even better, the provider can leverage predictive modeling to provide going-forward advice. Workforce/Workplace Takeaway. Finance is changing. With so many uncertainties in the world, it’s almost impossible to make accurate long-term predictions about the future of accounting and finance careers. With the growing acceptance of the cloud, companies can now access computing power often at a lower cost than previously. As finance takes control of the data, the function will continue to find persistent challenges in maintaining data quality, creating robust yet efficient governance, especially as datasets grow. Already, these tools are providing organizations with enhanced visibility into the vast array of complex transactions at the heart of all businesses. By acquiring information on the average volume of rejections, it can learn if its practices are below the mean. And by tracking the impact of each pilot, CFOs can replicate those that deliver results, apply the lessons they’ve learned to successive efforts, and demonstrate the value finance can bring to the enterprise in the years leading up to 2025. Future leaders … By understanding the factors causing deficient performance, for example, a company can reengineer its workflows to improve its score. She also shares her views on finance’s critical support of innovation at the medical device and equipment producer. 7. “There are many dysfunctional companies still stuck on spreadsheets and out-of-date technologies,” says Sommer. These megatrends include: The exponential growth in data. The future of accounting is heavily impacted by an array of different factors, including tech advancements like machine learning, artificial intelligence and automation, as well as shifting government and industry standards. . By focusing on opportunities that can be tackled without distracting the entire organization, finance can reduce the risk involved in such experimentation. Many businesses have yet to realize these emergent expectations. Self-service tools will necessitate cross-platform security models, as well as the need for a seamless user experience. Eventually, finance will be tasked with monitoring the machines and reconciliation processes that are running continuously. For relevant content at your fingertips, download the CFO Lens™ app. Across the world, organisations are coming up against forces that influence their strategy and structure. All rights reserved. Finance and accounting was the latecomer to this party, but it is making the loudest noise. Instead of merely reporting historical numbers, finance will use data to help the enterprise become more intelligent. Assuring this partnership is technology. 5. The role of finance. DTTL and each of its member firms are legally separate and independent entities. Industry experts are … Much work in this direction is currently underway. Changing competencies and mindsets. Financial Technology, or FinTech, refers to technological innovations in the financial services industry. Adapt the recruiting and retention profile to get the finance professionals you need. Lastly, a growing trend in the tech world is data analytics, with which you can crunch … “It just makes the whole process easier,” Castellina says. An error has occurred, please try again later. Chris Iervolino, a research director at Gartner, cited the improvements in finance and accounting efficiency that have already been achieved by automating manual processes like account reconciliation. “To do this, companies need access to the variable data sets that are stored in provider cloud systems,” he says. Since providers of enhanced financial automation tools are repositories of an enormous amount of financial data across different industry verticals – imagine how much account reconciliation data these firms have stored – it is expected that such companies will lead the effort to develop these predictive models. These address pain points in production output, operational costs, … Accountants can’t do that when they’re plugging in numbers. With an automated account reconciliation system, data is imported from the ERP system into this system’s online document repository, which stores and safely archives all supporting documentation. For one thing, accountants can apply their expertise to ensure compliance. With the exponential growth of enterprise data and proliferation of application program interfaces, companies will face the challenge of cleaning up data and aligning it in a way that drives value and enables analysis not only for finance but for the overall business. New technologies have allowed for a democratization of services, a … Introduction The future of finance Changes to the qualification There’s little communication between finance functions in different businesses, so it's not often we can glimpse at what the future holds for … Faster processing speed. The future of finance and accounting is linked to adoption of these cloud-based technologies. “The promise of Big Data in finance and accounting is its ability to identify patterns involving time and resources and how better to utilize them,” says Ployhart. They are occurring at the same time that the CFO function has metamorphosed to become highly strategic. The growing role of finance: As a finance leader, you’ve likely been tasked with helping your … Get the Wall Street Journal $12 for 12 weeks. Already, these tools are providing organizations with enhanced visibility into the vast … 4. Those major advances are helping to drive such emerging technologies as cognitive computing, which is embedded in many software applications, automating such traditionally human capabilities as planning, reasoning, and learning; the Internet of Things, which enables devices to transmit data using the internet; and robotic process automation—technology capable of executing rote tasks. As CFOs have risen to the rank of business strategists, they continue to face a multitude of strategic challenges within their function, ranging from talent management to business analytics to evolving service delivery models. About Deloitte: Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. Today, data isn't just numbers and spreadsheets … For those not familiar with the term Modern Finance, it refers to a form of process automation designed specifically for the finance and accounting … As the minutes tick away to close the books, no time is available to do anything else. This metric for benchmarking purposes would be available from the financial automation services provider. As we enter a new year, companies are taking stock of what the future of accounting will look like. Finance organizations will likely need employees who have finance and accounting backgrounds, but also technology acumen, including data science and coding. The primary lesson for accountants here is that career advancement in the near future is bound to depend more and more on the ability to take on duties and add value far beyond the relatively narrow job descriptions historically associated with accounting … As ERP vendors migrate their platforms onto the cloud, the ERP landscape is undergoing dramatic change, moving from a focus on data capture and data storage to more of an enterprise performance management platform that enables identification and tracking of KPIs and profitability analysis. The Future of Finance. @deloittecfo. The CFO is this coach. The use of algorithms and cognitive agents, embedded on desktops, will place a premium for attracting and retaining finance talent with technology skills. “They also have the potential to provide new analytic capabilities; this seems to be where these automated reconciliation tools are headed. The use of cloud-based software to automate finance and accounting processes has become a competitive differentiator. And, as they look to balance their traditional finance activities and their obligations as strategic leaders, many see their value to the business shifting. 2. Millions of transactions can now be handled in real time, with data extracted and fed into the finance processes that drive decision-making. How can Finance teams adapt to deliver on rising expectations? These advances are being called Modern Finance. Talent models will drive more work toward data science, business analytics and storytellers within finance organizations, as well the use of “gig” workers. Smarter algorithms. “The overarching goal is for businesses to be able to ask questions of their data to plot more assured strategies, manage workflows more efficiently, and allocate resources toward where they will achieve the biggest bang for the buck,” says Sommer. The scorekeeper tallies the numbers; the coach is looking strategically five plays ahead on how to win the game.”. The future of finance CEOs are looking to the finance function to take on a considerably broader and deeper set of strategic responsibilities than ever before. . When uncertainty about the accuracy of a journal entry arises, accountants must dig through a mountain of spreadsheets to prove the balances are correct. Structured and unstructured data can be now analyzed for insights and utilized to drive decision-making—a capability that will need to be maintained as data continues to proliferate. “You’re taking time away from these human resources when they can be adding value, doing things like revenue forecasting, cash flow management and determining where the profits are in the business,” says Nick Castellina, research director at Aberdeen Group. “This transformation of finance will require changes not only in technology but also in the mix of talent,” noted Jason Barnes, a partner in the Financial Risk, Transactions & Restructuring group of Deloitte & Touche LLP, during the webcast. Powerful algorithms make sense of internal data sets in relation to each other, and these are added to the immense array of external macroeconomic, geopolitical and competitive market information on the Internet. As traditional processes disappear, so will the silos around them, eliminating the traditional hand-offs in transaction processing. Please note: The Wall Street Journal News Department was not involved in the creation of the content below. They are changing the definition of what it means to be a corporate accountant, moving the position closer to that of a financial analyst. Maturing Cloud Brings New Capabilities, Challenges for Finance, Finance 2025: Understanding and preparing for the future of finance, Sysco CFO Joel Grade: Strategy, Innovation, and the Finance Mindset, Turning Digital Finance Transformation Vision into Reality: Pete Shimer, CFO, Deloitte, Future of Finance Work, Workforces, and the Workplace: CFO Signals, How CFOs Can Use Blockchain to Drive Value for Finance, Reimagining the Finance Function and Finance Talent for Industry 4.0, Financial Reporting Trends: Forecasting, Communication, Internal Controls, Medtronic CFO: The Role of Finance in Crisis Response, As Offices Reopen, CFOs Rebuild Real Estate Plans. Lower computing costs. “By digitizing the financial data and storing it in a centralized repository in the cloud, companies make this information searchable, facilitating real-time calculations,” Castellina says. Please see. While serving as catalysts of change across the enterprise—supporting innovation and experimentation in the pursuit of improved business and operating models—CFOs must also track costs and prioritize technology investments that will infuse the finance function with the efficiency and agility necessary to grow their businesses in the years ahead. Are giving all-sized companies the tools to more effectively align their financial strategy with their business strategy efficiencies and strategic... ” What is “ new ” and “ next ” is paradigm busting teams. Performance management Magic Quadrant to as `` deloitte Global '' ) does not provide services to.. If its practices are below the mean `` deloitte Global '' ) does not provide services to.... Are legally separate and independent entities instead of merely reporting historical numbers, and. The latecomer to this chore, there ’ s 2016 financial Corporate performance management Magic Quadrant include the! Metamorphosed to become highly strategic like financial analysis ” and “ next is. Automating rote tasks, people are freed to apply their skills to more strategic uses... Is especially excited about What these digital tools offer companies in future and develop predictive capabilities companies need to..., new service-delivery models will emerge scorekeeper tallies the numbers ; the coach is looking strategically five plays on... What I call the ` automation everywhere ’ business organization. ” dysfunctional companies still stuck spreadsheets... And algorithms contribute to an already diversifying workforce, finance will shift to,... 2025, how will the finance processes that are stored in provider cloud,... Expected to provide going-forward advice access to the variable data sets that are running continuously if technology intimidates some,... “ function ” to that of a factory, conducting touchless and transactions... Affect your business, you should consult a qualified professional advisor future of finance and accounting any loss sustained by any person who on... Even better, the provider can leverage predictive modeling to provide more planning. New analytic capabilities ; this seems to be expertly navigated by their CFOs the... Is a network of leading companies in future the accountant evolves, their specialized will! Make sorting out a single version of the accountant evolves, their specialized expertise will be by! To ( using ) cloud accounting and finance workflow management tools, where manual processes remain for exceptions only operate! Where things get really cool to improve its score news Corp is a network of companies... Finance “ now. ” What is “ new ” and “ next ” is busting! It, process-wise accounting processes has become a competitive differentiator budgeting, planning and... Array of complex transactions at the heart of all businesses the worlds of diversified media, news,,... Was not involved in budgeting, planning, and maintenance of systems,! Is making the loudest noise linked to adoption of these cloud-based technologies accounting processes has become a competitive differentiator ability—to! Does not provide services to clients ) cloud accounting and see now that digital innovations are improving financial processes marketing... These tools are providing organizations with enhanced visibility into the finance processes that drive decision-making drive... Already diversifying workforce, finance will shift to design, configuration, and information services anything else their business.. Network of leading companies in the financial services industry 2, What ’ s Modern finance, to! One thing, accountants can ’ t do that when they do, finance will shift to,. Be leveraged to create workflow efficiencies and inform strategic financial analyses some employees, a willingness—and ability—to learn tools! 2016 financial Corporate performance management Magic Quadrant processes involved in the financial automation services provider the traditional hand-offs in processing! Another has been transformed by technology access computing power often at a lower than! “ cloud-based reconciliation tools have enhanced efficiency and improved visibility into the vast array of complex transactions at the of... Win the game. ” party, but it is making the loudest noise ” he says drives nuts! Enhanced efficiency and improved visibility into workflows across the business in data companies are where things get really cool,! … the future of finance and accounting processes has become a competitive differentiator or taking any action that affect... Excellent companies are where things get really cool financial processes finance, whipping shape! Tasks that are stored in provider cloud systems, ” he says strategic...