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By Eric Baldwin

Traditional business models have been replaced with digital ones, which requires new skill sets and processes for the entire finance department. Three areas shaping the role of finance and accounting professionals include automation, best practices in forecasting, and a shifting emphasis on business partnering. CPAs are no longer bookkeepers; they are strategic business partners.

Relying solely on spreadsheets for planning and reporting results in poor visibility across the entire business cycle. The increased risk of human error coupled with time-consuming manual consolidation creates an unstable environment for addressing a client’s needs.

Automation

According to a recent Statista report, automation products are expected to generate about $214 billion worldwide this year, and the process automation segment is expected to exceed $83 billion. Automation is vital to most modern industries, including industrial software development in the fields of tech, engineering, and scientific research. Industrial software alone is expected to be worth $43 billion by the end of 2021. Manufacturing has long embraced automation, but it has stayed mostly on the production line. Automating finance practices is equally essential to keep pace with the rising demand for speed and accuracy.

Many organizations, however, still rely on a finance operation focused on traditional practices and costly manual processes. Automation is critical to addressing many common pain points, particularly if operations are serious about leveraging approaches such as AI to help power their digital business initiatives. It is imperative for the finance team to drive its own automation agenda, not only across their core planning, budgeting, and forecasting activities, but also across their end-to-end financial planning and analysis (FP&A) activities, including more complex consolidation processes.

Best Practices for Forecasting

An uncertainty is plaguing the business landscape, so effective forecasting has never been more important. Today’s markets require the ability to forecast and reforecast more quickly, along with focused scenario modeling essential for organizations to be able to respond and act with ease. CFOs can spearhead this effort by adopting best practices around six key forecasting foundations: scope, participation, modeling/scenarios, ensuring value from data/predictive activities, measurement, and culture. These activities lead to a broader transparency for CPAs during the auditing season.

Partnering through Collaboration

According to Gartner Inc., developing digital skills is seen as a prerequisite for finance leaders today. Yet, many cite managing financial information as their key task, with managing business performance a close second. CFOs, in particular, see a growing need to extend their FP&A capabilities across the enterprise so that budgeting, planning, and forecasting activities include key corporate functions, such as sales, supply chain, human resources, and technology to enable truly integrated reporting. Adopting this broader, more integrated approach means that both finance and business leaders can trust their figures to support real-time decision-making. CFOs who embrace AI technology to encompass end-to-end processes such as record-to-report and order-to-cash will have a competitive advantage with more agility to scale quickly and efficiently.

Consider these questions when embarking on the digital transformation journey:

• Is your current finance system agile enough to address the inevitable disruption and challenges of big data?
• Is the finance team positioned to reforecast quickly when the business changes?
• How advanced is your finance system toward the automation of core planning, budgeting, and forecasting processes?
• Are you in a position to enable faster groupwide consolidation and reporting?
• Do you have trustworthy figures for real-time decision-making?

Unified Planning

Unified planning aligns departments across the entire enterprise, thereby improving compliance and controls around the planning process. Integrated planning links financial targets to operational drivers − the day-to-day activities of each department. Combining performance monitoring with integrated planning means you can rapidly make decisions, replacing rigidity with agility in the planning process. It requires self-service modeling to customize planning rules and adjust to respond to growth and change.

Because departmental processes can change rapidly, your planning processes must allow business users to securely access their own data and define key performance indicators quickly and easily on their own. The result is centralized governance matched with local agility that allows for greater transparency.

All systems have common relationships within a company. Harmonizing the data to unify planning so that it tells a consistent story and leveraging that as an asset is critical to a CPA’s ability to move to actionable accounting instead of the traditional tracking of credits and debits.

Eric Baldwin is vice president of customer success for Jedox Inc. in Minneapolis, Minn. He can be reached at info@jedox.com. 

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