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Why Are Companies Still Distracted From Finance Innovation?

How do finance organisations make the transition?

25May

Last year, CEDA conducted research into Australia’s Future Workforce. It provided insight into how the impact of computerization, digitalization and automation will affect the future workforce in Australia. Even though this report is Australia-focussed, the report represents the shift in the global future workforce. The report details how a large number of existing jobs are slowly disappearing thanks to emerging technology and new types of jobs.

Another article, from one year earlier, provides insight into the 101 most endangered jobs by 2030. It shows an extensive list of jobs that will potentially be replaced or made redundant or radically changed through technology, robots or artificial intelligence. This report highlights the term 'technological unemployment', which identifies transactional roles that will likely be affected. This list also provides some of the traditional finance, accountancy and legal roles that could be affected, such as:

  • Financial planners/advisors
  • Financial Accountants
  • Tax advisors
  • Auditors
  • Bookkeepers
  • Lawyers
  • Compliance officers
  • Bill collectors

With this in mind, it’s interesting that many finance leaders are still discussing shared services, business process outsourcing, traditional ERP transformations, etc. to optimize and reduce the costs of their finance operations. Additionally, I'm always surprised to learn how finance still continues to hold on to transactional accounting activities, periodic month-ends, financial reporting packs, etc. While more and more organizations demand continuous real-time finance updates and financial insights to support their business decisions.

During a recent seminar, I was introduced to the 'continuous accounting' framework. And although many senior finance professionals, finance directors and CFOs support this future accounting model, many finance professionals are still struggling how they are able to transition from their current financial model towards this 'continuous accounting' model.

During many conversations over the last few months, I’m surprised how many finance organisations are still looking at shared services and outsourcing with relevant ERP technologies to optimise their finance function. However, the finance software landscape is rapidly adopting artificial intelligence. Instead of introducing traditional finance optimization programs, it’s important for finance professionals to adopt a finance innovation mind-set to introduce more effective methods, to deliver a continuous accounting environment and deliver the desired finance and business results.

Through the development of new and improved artificial intelligence accounting tools, which allow the 'complex' accounting rules to be captured and translated into accounting technology-learning solutions, there will be a continuously reduced need for:

  • Transactional finance activities, e.g. reconciliations, journals, amortizations, tax calculations, consolidations, intercompany, etc.
  • Data collection, manipulation and filtering,
  • Forecasting, scenario-based planning, etc.

By introducing finance innovation with effective AI accounting tools, it allows the finance function to really analyze, gather, filter and start to automate the collection of that data to really provide the financial accountant with the relevant summarised finance information that allows finance to add true value to their stakeholders and their overall business goals and targets.

Instead of optimizing existing finance practices, processes and operating models, it’s imperative for finance to start transitioning towards completely re-assessing their processes, ways of working and the use of AI accounting tools. Only through effective finance innovation can the finance and legal roles evolve to drive better decision-making capability for the relevant internal and external business parties.

Sources

Micha Veen is founder of Unique Excellence, which specialises in finance innovation to deliver true finance effectiveness. His extensive experience across global SAP implementations, shared services and outsourcing within some of the industry-leading multinationals, has allowed him to introduce true finance innovation at the heart of complex businesses.

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