By Mike Yeager
Executives are increasingly turning to their finance teams for answers about the future of their organizations. Instead of exclusively focusing on what happened in the past, finance teams are being asked to project what will happen in the future.
Traditional accounting tools are not equipped to answer these questions. Often, they require hours of manual data entry, have limited or static reporting options, can’t be connected to other business tools, and don’t support collaboration. Fortunately, modern finance tools have been designed to eliminate these issues and support the modern CFO in the role of business strategist.
As society becomes more mobile, can complete tasks online without paper, and has instant access to information through the applications we use at home, we begin to expect the same things at work. Here are how accounting practices are being influenced:
What follows are some of the tools that are enabling traditional accounting to shift to modern finance expectations.
We all access cloud apps on our phones, from Instagram to Gmail. Cloud accounting software satisfies our need for 24/7 access and allows accounting teams to manage a business’s financials anytime, anywhere, on any device. Employees all have access to the same information at the same time.
Cloud software has additional benefits for businesses.
Accounting tools today focus on automating and streamlining processes. By handling everyday busywork, these products allow accounting teams to be more proactive and productive.
Accounts receivable (AR) automation software reduces much of the back and forth associated with the receivables process, offering a better experience for customers and staff by speeding payment. AR automation provides features such as the following:
Accounts payable (AP) automation software makes it easier to track vendor invoices and approvals so you don’t fall behind on payments or issue incorrect/duplicate payments. AP automation provides features such as the following:
Expense management software makes it easier for employees to submit expenses and for managers to review and approve them. Expense automation provides features such as the following:
Close management software reduces the number of days it takes to close the books. Close management software provides features such as the following:
Business intelligence requires collecting, analyzing, and presenting data from across your business in a way that’s easy to understand and fosters better business decisions.
Most of today’s accounting system software offers built-in business intelligence tools such as reporting and dashboard capabilities. These tools are designed to show traditional financial statements, like an income statement or a balance sheet, alongside other metrics to provide a comprehensive view of the business.
Some, like Microsoft Power BI, specialize in collecting data from separate systems so they can be viewed together. These products also offer reporting and dashboarding capabilities, and often incorporate artificial intelligence and machine learning to help identify trends or ask new questions.
It doesn’t make sense to have such specialized tools if they don’t work together. These products need to share information and act as part of a seamless system that serves the entire accounting and finance department.
Integration capabilities offered by cloud platforms and public interfaces are critical financial solutions. These capabilities have transformed the way systems communicate and make it possible to build a cohesive system using multiple products from different vendors.
Artificial intelligence and machine learning capabilities are making inroads into accounting technology to help spot anomalies and identify trends.
Many have alerts or notifications prompted by this technology. For example, if you’ve let an approval sit for too many days, the software recognizes this and may put it back at the top of your inbox with a reminder. You may get an alert if there is an unexpected spike in expenses or revenue. Or you may get a popup on a reporting screen asking if you would also like a report on a category you hadn’t considered.
Artificial intelligence and machine learning won’t replace CPAs, but this technology can help finance teams keep their attention on high-value tasks and identify the exceptions that need attention.
A modern finance solution using some or all of the tools above will equip the CFO and his or her team with taking on the new expectations of business executives.
The accounting profession is evolving, and technology has changed with it to support its new roles. Integration capabilities, accounting automation, and business intelligence are now must-have features, and more software developers are exploring the potential for artificial intelligence and machine learning in financial solutions.
CFOs and their teams continue to move away from traditional accounting practices such as historical analytics and data entry. Instead, they’ll be able to contribute to their businesses as strategic partners, offering real-time information and insight.
Mike Yeager is vice president of Cargas, a software company in Lancaster, Pa. He can be reached at myeager@cargas.com.
For more on issues affecting corporate accounting and finance professionals, check out PICPA’s Changing Role of the CFO and Controller resource page. Also, be sure to sign up for weekly professional and technical updates in PICPA's blogs, podcasts, and discussion board topics by completing this form.
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