Published on the 14/12/2017 | Written by Dominic Parsons
Automation is impacting personal and professional lives; Dominic Parsons, CEO of business intelligence vendor CALUMO, explains how it will boost the finance department…
The development of intelligent automated systems will help change the face of accounting during the next decade. This is not a technology industry sales pitch, it’s a warning issued by the UK profession’s peak membership body – the Association of Chartered Certified Accountants (ACCA).
Another recent study estimates advances in machine intelligence mean accountants and auditors have a 94 percent chance of being automated during the next 20 years. These are startling predictions. The growing influence of disruptive technologies, such as process automation and corporate digitisation, are pressuring finance professionals into adapting to the digital era.
Accounting professionals are already reeling from the democratisation of basic accounting functions. The ACCA says new tools have made it simpler for non-experts to design automated workflows for processing invoices, tax returns or business activity statements, removing the value of common financial services.
Small to medium-sized businesses have been empowered by cloud-based accounting systems. These offer functionality previously reserved for large and expensive enterprise resource planning systems. Now finance departments are facing their biggest challenge yet. It’s likely to change the role and skillset of the professionals working within this area.
A new reality
A recent study of Australian finance chiefs, conducted by recruitment firm Robert Half, found finance professionals will need to develop more technical and soft skills in an evolving business landscape. However, a quarter of respondents are reluctant to embrace change despite the march of emerging technologies and shifting industry expectations.
When asked about key priorities of the finance function, 36 percent of Australian CFOs highlighted keeping pace with changing technology as the number one initiative, followed by meeting regulatory compliance mandates (25 percent) and harnessing big data (15 percent). These priorities are dictating a major skill shift within the industry.
More than one in three (38 percent) of CFOs believe finance professionals will need to develop skills in financial software packages. A quarter expected analytical skills to be a priority, 21 percent pointed to accounting and financial reporting standards while 16 percent said regulation, risk management and compliance.
The ACCA listed manual calculation and income tax filing, employment and sales, as well as routine back-office work, as skills that were in decline. Compliance reporting is also expected to become more automated through technology and analytical tools.
Machine learning technology is automating more complex tasks within the finance department. Increasingly, finance teams are being called upon to analyse data and provide useful insights. Strong business acumen and communications skills are also becoming essential soft skills.
While core technical skills and ethics remain critical, accountants will need to combine these skills with creativity, leadership, communications and emotional intelligence.
A future with robotics
As if machine learning wasn’t enough, robots are also making their way into the finance department. A report by Ernst and Young defines robotic process automation as software that operates as a virtual workforce controlled by the business operations teams. The software or robot can emulate the human execution of tasks.
Robotic process automation has many applications in the financial services industry. In the finance and accounting areas it can be used for fixed-asset accounting, to record journal entries, conduct general ledger account reconciliation, perform intercompany transactions and maintain accounting master data.
Firms can also use robotics to audit expense reports, manage incoming invoices and process payments.
The report estimates a cost reduction of up to 70 percent on some manual activities by shifting to robotic process automation. By freeing the finance team from routine processes, it gives them more opportunity to work on business analysis and develop insights.
Looking over the horizon
You don’t have to look too far into the future to realise traditional tasks like processing transactions and producing reports is not where your finance team will deliver real value. Enhanced use of machine learning, and the introduction of robotic automation, means repetitive tasks can be completed quickly and accurately without human intervention.
The finance team will increasingly create value by navigating vast amounts of data produced within the business, generating valuable insights that support better decision-making processes.
Dominic Parsons is Chief Executive Officer at business intelligence and performance management platform vendor CALUMO.