Like many office occupations, accounting is one of those that is heavy into paper, heavy into people, and very heavy into hours of work in the office.
Yes, there have been calls to digitize the function.
The decades’ old use of spreadsheets is seeing some innovation through better use of macros, ability to build simple data models, better query function, and 3D data visualization tools (I bet you don’t know that!).
If people get over the fear of losing their jobs to a piece of software, arguably by coming up of new ways of work, we might be able to see an acceleration of accounting processes, perhaps improve the accuracy of information (and lesser instances of procrastination over why the software isn’t doing what we think it should do).
To be clear, accounting didn’t wait for COVID-19 to initiate change. Dr Josh Heniro, senior director, Southeast Asia and Australasia, Institute of Management Accountant, lists out some of the changes already occurring on the job.
Before to COVID-19, how was accounting performed?
Dr Josh Heniro: Before the COVID-19 outbreak, many finance functions across a range of organisations and sectors were already transforming or evaluating their operating models.
This is largely in response to a broad and well-documented set of challenges and drivers, which included managing costs, delivering value, attracting and retaining talent, making efficient use of technology and automation, and complying with new regulations.
There was already a shift towards being future-ready as it has been accepted that automation is not just coming; it is already here and will only increase and evolve very quickly.
Hence, there is a need to embrace technology and not see it as a risk, a need to develop and adapt skill sets, knowledge, and understanding in data analytics, synthesis, artificial intelligence, robotics, intelligent process automation, and other similar technology.
Based on global findings, finance and accounting jobs involving leadership and people management are most likely to survive the robot revolution. These jobs require the human skills of decision-making, connecting, coaching, planning, and creative work.
Finance managers and directors in these value-added functions and possessing strategic insights are amongst the lowest probability of automation as compared to finance administrators and technicians who mostly have routine and repetitive job roles.
How has COVID-19 impacted the way the finance function operates? (accounting, reconciliation, the closing of books, etc)
Dr Josh Heniro: The COVID-19 crisis has highlighted a host of sustainability risks and added a new dimension in today’s global marketplace, making the need for strategic analysis and execution greater than ever.
While technical accounting is still an important foundation, accountants are being called on to demonstrate decision making, strategy and leadership skills.
In these unprecedented times, management accountants are in a unique position to oversee and even lead the strategic analysis process.
With their business and financial acumen, management accounting professionals have a great opportunity to play a valuable leadership role in the strategic management and analysis processes of an organisation.
Successful strategies require an understanding of an organisation’s long-term goals, competition, resources, and effective implementation of the. Strategic analysis is the process organisations must go through to make the right strategic choices.
Finance leaders are also taking the initiative in moving beyond the culture of collaboration to make a company’s reporting include sustainability information, drawing on their ability to connect metrics to the organisation’s overall business case.
This requires cross-functional collaboration, for instance, with the sustainable business or environmental health and safety teams on climate risk, or with the HR department on human capital issues.
To prepare reports that address investors’ concerns and offer the clearest possible picture of where the company stands on sustainability.
This will become increasingly important in the coming years.
Key for CFOs and finance leaders is to demonstrate a connection between sustainability and company value, that there is long-term profit in allocating capital to a business that practices sustainable growth and proactive risk management, employee engagement, retention and corporate reputation.
What has been the most significant change in the way of work for accountants/finance team?
Dr Josh Heniro: Through investments in advanced technologies, finance is undergoing a shift from being reactionary and transactional to becoming a more proactive and analytical function with the agility to respond to business needs as they arise.
In a survey conducted by IMA and Deloitte, the insights gathered show finance at the precipice of a huge reset, spurred on by new technology and more pressure to add value while containing costs.
The survey, “From Mirage to Reality: Bringing Finance into Focus in a Digital World,” captures critical data on finance’s progress towards intelligent automation and adoption of technologies like robotic process automation, cloud-based accounting solutions, blockchain, machine learning, and AI.
All of these technologies have a particularly useful place in the post-COVID-19 world, where finance will be contending with the need to reduce costs amid declining revenues, to deliver actionable insights to inform decision-making at the uppermost levels of the organisation, and to upskill employees who want the opportunity to focus on more value-added, analytical work.
Amid the COVID-19 crisis, businesses face an ever-growing collection of threats that, if not appropriately acted upon, can irreparably damage the financial outlook of a given company and lead to job losses as a result.
Numerous cybersecurity challenges have emerged as thousands of companies have undergone a sudden shift to remote work. Breaks in the supply chain have also become a concern, with many businesses nationally and around the world shutting down due to the pandemic, which has impacted daily operations and the ability to continue functioning.
COVID-19 has also highlighted a host of sustainability risks, ranging from over-reliance on countries in supply chains to human capital issues to many other risks. Organisations are starting to ensure that reporting reflects all material risks to make informed decisions – and become an Integrated Enterprise.
Among the factors that lead to better adoption of cross-functional sustainability reporting, perhaps the most crucial is for leadership from the top. CEOs must necessarily be in the lead, but CFOs have a vital role to play as those responsible for the financial reporting function.
As CFOs are increasingly expected to be involved in strategy and decision-making, more of the responsibilities for accounting for non-financial risks will fall on them as well. For this reason, the finance chief will be instrumental in pushing for the breaking down of corporate “silos” and the sharing of vital information about risks and liabilities.
CEOs and CFOs must both embrace a “value-creation” mindset that encompasses a working command of the overlapping concepts of risk management, governance, innovation, human resources (HR), technology and sustainable business.
As leaders encourage this approach from the top, departments begin to take better account of where potential risks lie, whether they be exposure to pandemics or natural disasters.
The CFO’s team can serve as a linchpin for various areas of the company – bringing together the sustainable business and investor relations (IR) teams with other disciplines, such as HR, facilities, operations, and environmental health and safety.