It’s a Whole New Ballgame: Why Automation and Collaboration are the Future of Accounting

by Tom Kelly

Here are a few ways finance leaders can rethink their approach and challenge the status quo.

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The quick onset of the pandemic shined a light on where many companies fell short and for finance, it highlighted traditional practices where change was long overdue. When dealing with business-critical information, introducing new practices can come with hesitation, and even fear.

Just earlier this year, almost 43% of finance and accounting professionals reported that their company’s accounting process still required considerable manual effort. The report from the Institute of Management Accountants and Deloitte was released just before the widespread impact of COVID-19 and it underscored the profession’s slow adoption of automation. Fast forward months later and finance and accounting teams are overwhelmed with new responsibilities while trying to drive business priorities, relying on dated or manual processes.

The world around us is being forced to accelerate and change. Now is not the time to go back to ‘normal’ but shift to modern practices that will lead accounting and finance into the future.

Here are a few ways finance leaders can rethink their approach and challenge the status quo.

The expanded role of finance

2020 has been a tough but transformative year. It’s also elevated the role finance and accounting play within an organization. In a recent study, 45 percent of executives said the influence of the finance department has grown either slightly (26 percent) or substantially (19 percent) since December. If you’re a finance leader, you’ve likely been tasked with helping your business climb back while taking stock of outstanding receivables, pending liabilities and cash flow.

This heightened responsibility falls not just on the shoulders of CFOs and controllers, but the teams they manage who help deliver these results. With the expanded role, you’ve probably found yourself reevaluating everything that works, but most importantly, what doesn’t. Many finance teams have already begun turning to automation to help manage complex reporting, track against KPIs and even well-known accounting cycle processes like accounts receivable, accounts payable, payroll, etc.

Accountants on the other hand have been slower to adopt these broad changes that are making waves throughout finance. Accounting teams have traditionally relied on manual processes and spreadsheets to record journal entries, produce trial balances, reconcile bank statements and revenue. But COVID-19 has changed the way many see their roles and contributions to an organization. Accountants are no exception. As remote work continues, leaders are turning to tech to help with collaboration in a mostly virtual environment.

As businesses re-establish themselves from an uneven recovery, now’s the time to embrace and accelerate the change that has already started taking place and move to a more automated future.

Identifying a smarter approach

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-looking activities like forecasting and data analytics. Traditional approaches to managing the accounting cycle have driven up costs, increased the risk of errors and delayed access to critical financial data. After all, accounting is the language of business, which makes accountants core to financial measurement and stakeholder engagement.

But the current situation should also accelerate how companies adopt new approaches, especially in accounting. Rather than maintaining the status quo, companies that want to maintain more timely financial insights must replace the traditional record-to-report process and look for new approaches like continuous accounting. Continuous accounting breaks the bonds associated with statutory deadlines of month or quarter end close and takes a process view of all accounting related activities whether they are close related or not. Continuous accounting installs a more frequent completion of those tasks from reconciling a bank account to processing payroll.

Every time a person moves information from one system to another, the possibility of making errors increases with every move. That’s why the ability for systems to transfer and validate information without human intervention is foundational to continuous accounting. The ability to automate day-to-day tasks and take an increased workload off your accounting teams is being built into most of the financial software available today. If it is not… don’t buy it.

Automation eliminates the time that would be spent double-checking data and performing reconciliations, significantly freeing up time to step away from a record-to-report process that has failed to modernized. With this new found time, finance pros 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.

Empowering a new mindset

It’s not enough to just adopt these new solutions without also looking inward at the team around you. It’s important to “walk the walk, and talk the talk.” If you’re a CFO or Controller, you are looking to your teams to deliver the insights that will pave the way for business continuity and success. Your role in leading these teams requires the right guidance and thorough plan on how they get there. Long-term change rarely happens overnight and empowering a new approach requires a mindset and culture shift. Never assume that people will make a change simple for change’s sake.

It’s important to give your teams perspective on how their individual goals help contribute to the overall success of the organization. In today’s environment, it’s easy for an employee to feel isolated, especially with remote and flexible work environments becoming the norm. Only a quarter of executives say they will require most or all of the finance team to return to the office when possible, indicating a major shift in the workforce that finance will not be immune from.  

An important part of planning for the future is making sure that you can sustain high-performing teams in an environment that supports the business. Beyond ensuring teams have access to the right information and technology to do their jobs, finance leaders management styles must be prepared to evolve. Leaders must challenge and empower teams to think differently and be open to new approaches to effectively compete and win at this whole new ballgame.

Tom Kelly is Senior Director of Product Management at Oracle NetSuite.