In a recent poll of 136 accountants, when asked how confident they felt about the future in their roles, 30.1% said they were “not at all confident”, however, just a quarter of those surveyed (25%) admitted to feeling “totally confident” about their future within the profession – a reflection of the complex challenges and unique opportunities which face the sector in the coming months and years ahead.
Without doubt, the pandemic has accelerated the process of digital transformation. It’s a reality that has been thrust upon the accounting world – and everyone else – sooner than expected. Compounding this, organisations are facing some huge challenges: recovering from two years of intermittent lockdowns, the very real prospect of insolvency, escalating energy prices, tax rises, living with Covid, the cost-of-living crisis and the war in Ukraine with all its global consequences.
As technological innovation continues, we’ve seemingly leapfrogged ten years in a matter of months. How can accountants help position their finance functions and in turn help their business navigate their way toward a more profitable, long-lasting future? In short, it’s about effective adoption of new technologies, looking at the entire business – the bigger picture – and focusing on staffing and building the team of the future.
An automated mindset
A decade ago, 75% of the work of a finance function was repetitive processing work, while around 25% was advisory. Those figures have now flipped as most businesses automate processes and systems and look to their finance function for deeper analysis and forecasts.
Now more than ever, it’s vital for finance functions to present themselves as profit generators rather than cost-saving centres. The demands of today’s business climate are forcing us to do more with less. Even the most crucial cost-oriented operational teams are now asked to deliver greater value toward the organisation’s bottom line. Automating time-consuming, manual tasks means freeing up accounting staff to focus on more strategic work.
Artificial intelligence (AI) is one key area of automation that is set to change the face of accounting operations, delivering efficiencies, reducing errors, and optimising workflows, while assisting professionals with real-time business decision-making based on insights driven by accounting data. Demand for AI-based accounting software has increased thanks to the sharp rise in digital payments, fuelled by the pandemic.
Payments processing is still very time-consuming and manual, so it’s easy to mess up. But with automation tools coming onto the market, real-time data is enabling businesses to have a more accurate, real-time view.
With increased automation, the finance function will have more time to focus on things such as capturing more timely payments and improved collection of other receivables such as deposits, structured payment arrangements, or any other items a business requires.
If there is anything the past two years has shown us it is the need for both finance functions and management to plan ahead to future-proof their businesses. Finance functions are well positioned to advise on risks and understand what’s needed now to ensure future survival.
Management will need a clear view of cashflow, reserves, investment, future opportunities and/or expansion plans. With increased automation, finance functions will be able to provide greater visibility at the touch of button and move on to offering more value-added advice such as how to enter a new market or introduce a new e-commerce offering.
ESG and sustainable credentials
It has also become apparent how fundamental environmental sustainability issues are to an organisations’ survival as businesses become increasingly accountable not just for their finances but for the sustainability of their operations. Environmental, social and governance (ESG) issues are becoming key concerns – and a major draw – for global investors, as their sights are fixed on sustainability and climate change, offering a widespread growth opportunity for auditing.
For many, the immediate need is about surviving the post-pandemic world, and sustainable practices may not yet be high on a firm’s agenda. It’s currently about survival, but businesses need to also consider their ESG capability and recognise that it’s something that they must focus on.
Considering options such as signing up for independent verification from organisations like ‘BCorp’ can provide you with an added edge over competitors. B Lab UK, a non-profit arm of the B Corporation, focuses on building and strengthening sustainable businesses with verifiable social and environmental credentials.
Collaboration is key
However, collaboration is also key of course, and finance functions will need a depth and spread of knowledge and skills in the future. Finance functions were already on a journey of change albeit slowly. What the pandemic did was force organisations to accelerate their digital journey. Now finance functions must prove they are up to the challenge of adapting.
As we navigate through the fog of uncertainty, what is becoming clearer is how intelligent systems can enable better decisions in business and how accountants can harness them to their advantage. What businesses need more than ever is a tech-savvy commercial accountant, rather than one focused purely on technical compliance issues. It is up to them to now seize the opportunity the new era of accounting affords.