Accountants can’t do that when they’re plugging in numbers. Looking to position finance as a contributor of value, it’s crucial for CFOs to think through what digital transformation signifies for their companies and their own roles. Most important, they are giving all-sized companies the tools to more effectively align their financial strategy with their business strategy. Today, we’re taking a closer look at the future of the accounting … By automating rote tasks, people are freed to apply their skills to more strategic needs like financial analysis. Rethinking Supply Chains: What Could Change? Faster processing speed. Finance leaders face numerous pandemic-related accounting and reporting challenges in the current quarter, with three areas rising to the top for many companies: forecasting amid uncertainty, communicating business-related COVID-19 responses to stakeholders, and a heightened level of concern related to internal control. Companies seeking to thrive will want to cultivate the skillsets necessary to build out self-service capabilities where users want to go, shifting from clerical and transactional abilities to FP&A and other technical aptitudes. Today, data isn't just numbers and spreadsheets … 1. 7. Changing competencies and mindsets. Yes, finance will likely be leaner, but that will mostly be a function of headcount in operational finance (order-to-cash, procure-to-pay, transactional accounting, etc. The future is already here . But he is especially excited about what these digital tools offer companies in future. “It just makes the whole process easier,” Castellina says. “Cloud-based reconciliation tools have enhanced efficiency and improved visibility into workflows across the business,” he says. Finance operating model. Download . Even better, the provider can leverage predictive modeling to provide going-forward advice. Instead, we see these technologies offering the opportunity to change the role of finance… “They also have the potential to provide new analytic capabilities; this seems to be where these automated reconciliation tools are headed. 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. 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 … Processes involved in budgeting, planning, and forecasting—which have historically required manually intensive end-of-month heroics—will become increasingly routine as a result of automation. They will be expected to thirst for knowledge about the business, and bring … For instance, say that finance and accounting in a manufacturing firm wants to learn whether or not the volume of account reconciliations it rejects is consistent with the experience of other manufacturers. These megatrends include: The exponential growth in data. 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. There’s this tremendous opportunity at hand to enable them to become strategic thinkers, in ways that weren’t possible before.”. “The increasing need for a more project-based, cross-functional workforce will require fresh thinking about how finance conceptualizes and addresses issues involving expanding geographies and skillsets,” observed Jamie Weidner, a senior manager with Deloitte Consulting LLP, who spoke on the webcast. The finance factory. Financial Technology, or FinTech, refers to technological innovations in the financial services industry. “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 use of cloud-based software to automate finance and accounting processes has become a competitive differentiator. They also should consider how they can digitize the finance function by implementing cutting-edge technologies (such as blockchain) to decrease costs and increase insights. Already, these tools are providing organizations with enhanced visibility into the vast … What might these calculations be? Understanding every nuance of current and future … From a workforce perspective, organizations will seek to hire data evangelists, capable of breaking down silos to enforce collaboration and data sharing across teams. For relevant content at your fingertips, download the CFO Lens™ app. By understanding the factors causing deficient performance, for example, a company can reengineer its workflows to improve its score. This is not Modern Finance. The future of finance and accounting embraces outsourcing because it is a solution that helps reduce operating costs while gaining the support of top finance talent, along with the experience of skilled accounting professionals. “There are many dysfunctional companies still stuck on spreadsheets and out-of-date technologies,” says Sommer. Industry experts are … 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. Finance also will be expected to provide more scenario planning and using advanced analytics to help solve problems and develop predictive capabilities. “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. … 4 Finance of the Future -looking forward to 2020 Drivers of change Finance is shaped as much by the global business environment as it is by internal factors. The proliferation of digital assistants, chatbots, and other digital tools will make self-service the norm in finance. 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 … Although some of you may worry that AI and ML will put finance teams out of business, we disagree. 2020 AICPA Meeting: SEC and PCAOB Developments. “For CFOs, it’s crucial to think through what digital transformation signifies—both for their companies and their own roles—and how finance can support the digital model that represents the culmination of such mega-trends,” commented Soderberg. As the pressure intensifies to close the books each month, these tasks become excruciatingly burdensome and anxiety-ridden, given that senior executive leaders are raring to access the financial data to possibly make adjustments in strategy and tactics. 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. . These are prized benefits of today’s Modern Finance, available to companies right now. 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. Self-service tools will necessitate cross-platform security models, as well as the need for a seamless user experience. The CFO is this coach. Algorithms have gained the capacity to drive innovation and communication, as well as changing how finance drives value across the organization. Finance … Workforce/Workplace Takeaway. When they do, finance and accounting will learn where they are ahead of the eight ball or behind it, process-wise. The future of finance is here Issues Accounting and reporting Auditing Governance insights Regulations Tax Strategy and operations Cybersecurity Human resources Mergers & acquisitions Risk … Technology is changing the finance and accounting industries, but that doesn’t mean humans are less valuable to the field than they once were. The role of finance. Modern Finance today – the future of finance is now. The result: CEOs can plot smarter strategies to be expertly navigated by their CFOs. Adobe Stock. “To do this, companies need access to the variable data sets that are stored in provider cloud systems,” he says. For example, an FP&A executive will be able to pose questions into a chatbot, such as asking for the outstanding AR balance or aging analysis. Future leaders … And, as they look to balance their traditional finance activities and their obligations as strategic leaders, many see their value to the business shifting. First, however, CFOs should have a clear understanding of key megatrends that are driving digital strategy, noted Mike Danitz, a senior manager with Deloitte Consulting LLP. In essence, finance will need to reevaluate ‘how and where work gets done, considering alternative talent models and looking for opportunities to integrate digital labor into the workforce. As machine learning and artificial intelligence … It is critical that … All rights reserved. “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. Over the past decade, one business function after another has been transformed by technology. Lower computing costs. Lastly, a growing trend in the tech world is data analytics, with which you can crunch … Finance organizations will likely need employees who have finance and accounting backgrounds, but also technology acumen, including data science and coding. These advances are being called Modern Finance. Self-service. DTTL and each of its member firms are legally separate and independent entities. Following are eight predictions about what the finance function of the not-so-distant future might look like, the activities it could perform, and how it might further evolve. 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. “These emerging capabilities will change the role of accountants from validating the accuracy of the numbers to making sure the CEO is creating the right business decisions.”. They are occurring at the same time that the CFO function has metamorphosed to become highly strategic. Robert Ployhart, Bank of America professor of business administration at the University of South Carolina, equates the above to “Staring at your feet while you’re walking, versus looking down the street at where you’re going and what lays ahead.”, He says “Automating rote manual processes, assuming this is available for a particular business function, is a `no brainer.’ You liberate intellectual assets to apply their expertise to more beneficial purposes. An interpretation of Future of Jobs 2022 report from World Economic Forum News Corp is a network of leading companies in the worlds of diversified media, news, education, and information services. As traditional processes disappear, so will the silos around them, eliminating the traditional hand-offs in transaction processing. The focus of finance will shift to design, configuration, and maintenance of systems. Finance is changing. By acquiring information on the average volume of rejections, it can learn if its practices are below the mean. Periodic reporting will be replaced by technology designed to enable the continuous tracking of sales, cash flow, and inventory levels to better drive strategic and operational decisions. Certain services may not be available to attest clients under the rules and regulations of public accounting. ERP. Can Business Models Contribute to Higher GDP? “This is unfortunate because functionally excellent companies are where things get really cool. By weighing the potential and power in mixing such foundational technologies to drive value—with ever-increasing efficiency, as the technologies mature—it’s possible to get closer to the finance function model of 2025. By digitizing financial data and automating traditional finance and accounting tasks, organizations make this gold mine of information searchable. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. “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.”. 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. “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.”. As we enter a new year, companies are taking stock of what the future of accounting will look like. 3. Technology won’t take your job, but it will change it. This will help the CFO guide and support more organization-wide initiatives. Many businesses have yet to realize these emergent expectations. 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. Part 1, European CFOs Confront an Uneven Recovery, Global Economic Brief: President-Elect Biden’s Agenda, Banking: Expand Plans to Integrate Climate Change, New Law May Drive Privacy Strategy Refresh, Now Is the Time to Reboot Risk Management, Global Economic Brief: Vaccines Point To Growth, CN Rail Rides Balance Sheet Strength to Recovery, This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Adapt the recruiting and retention profile to get the finance professionals you need. Others in the organization can be offered the same visibility into the financial data to improve the services they provide the business, Castellina notes. “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. 4. We explore how trends and innovations will shape the future in our Finance … Even if technology intimidates some employees, a willingness—and ability—to learn new tools is important. You also benefit from their advanced digital finance … 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. As more clients take these steps, this adds to the provider’s data storehouse, feeding the expanding knowledge of account reconciliation best practices. It’s tomorrow’s Modern Finance, whipping into shape today. Deloitte’s Insights for CFOs provides financial executives a customized resource to help them address the strategic, operational and regulatory issues they face in managing their finance organizations and careers, with top-line digests, research, perspectives and technical analyses. 8. Challenges too complex for any single individual or group to address will call for intense levels of collaboration. For those not familiar with the term Modern Finance, it refers to a form of process automation designed specifically for the finance and accounting … 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. With the growing acceptance of the cloud, companies can now access computing power often at a lower cost than previously. 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. Assuring this partnership is technology. Talent models will drive more work toward data science, business analytics and storytellers within finance organizations, as well the use of “gig” workers. 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