The Dawn of the New Era of Digital Transformation in Finance and Accounting

The world witnesses new trends from time to time. These trends comprise of new innovations and solutions that help in making things more refined for individuals and businesses. Of late, if there is one thing that has changed the largest number of business processes across the globe, that thing is digitalization.

Digitalization has impacted every sector in a way that has made it more refined, convenient, and accessible. Digital transformation has streamlined the finance and accounting processes of businesses to quite an extent. This is imperative too since the clients have become more educated than ever before, and they know exactly what they want from their accountants, especially when it comes to customer service.

To meet such increasing demands of customers in a timely manner and stay ahead of the competition, digital transformation has become a necessity now for businesses and not an option for them. Let us dig deeper into the same!

Important Statistics on Finance Departments

  • 9 out 10 (91%) accounting professionals believed AI enhances work productivity while 93% stated that automation eliminates the need to do repetitive tasks.
  • 94% of professionals agree upon the fact that financial management solutions help optimize their processes, while 92% believe the compliance process can be automated and streamlined with these efforts.
  • Almost 79% of them were worried about losing their jobs to automation, and 76% were concerned about a biased workplace environment due to AI solutions.

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Key report statistics

key report statistics digital transformation

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The Fourth Industrial Revolution

The industrial sector has gone through three revolutions in the past. With more and more technologies getting developed and disrupted across industries, this stage can be known as the stage of the fourth industrial revolution, explains Bernard Marr in his webinar, Digital Transformation: mega trends in the accountancy profession, (part of ICAEW’s 2018 virtual conference on digital disruption).

He further explained: “We are at the beginning of a new industrial revolution in which technologies such as artificial intelligence, machine learning, the internet of things, blockchain technology are really changing our world and challenging the profession of accountancy. Instead of getting scared, we need to approach this in a smart way.”

Marr advised accountants to use this as an opportunity to devise a business strategy that is aimed at making technological advancements in their processes to enhance the overall performance.

He stated: “We shouldn’t get scared because as we have learned with previous industrial revolutions, they have somehow made our lives better and I believe this new industrial revolution will also improve our lives and our world.”

As per a Deloitte report, by 2025, almost 8 billion people are expected to be online. While there are challenges associated with the use of technology, the benefits surely outshine the risks.

Digital transformation: The fourth industrial revolution

digital transformation statistics

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Top Digital Transformation Benefits

The following benefits will help you explain as to why exactly businesses are making their finance and accounting processes digitalized:

1. Technology Compliments Human Efforts

As per the consulting firm Accenture, “automation, minibots, machine learning and adaptive intelligence are becoming part of the finance team at lightning speed.”

Through machine learning and artificial intelligence, financial experts can gain valuable insights into actionable data and make informed decisions. This will not only help them in serving customers in an enhanced way but become more proficient and productive as well. There is no denying that repetitive and unproductive tasks can be taken care of by machines, but the emotional intelligence of human beings cannot be replaced, which forms the backbone of successful task execution.

2. Transforms the Role of a CFO

In the past, CFOs merely focused on the finances of the company. Today, with the help of technology, their roles are transforming into strategic partners, along with increasing ownership for risk management levels. This holds true for staff accountants also as they can provide their valuable feedback based on financial data available to them.

CFOs who are future-focused are becoming the agents of change who look forward to leading the company with analytics and automation and make decisions that are based on intelligent data.

3. End-To-End Process Automation

End-to-end automation helps in making processes more refined than ever before. Accountants can start with Account Reconciliation followed by managing tasks, analyzing variation, matching the transaction, and automating the journal entry. All these processes provide an end-to-end data view to enable analysis at the root level and perform other investigation techniques.

4. Robust Reporting using Analytical Tools

To enhance the efficiency of the processes to the maximum level, it is imperative to integrate the reporting tools with them. This will lead to handling a large volume of data, including details like daily, weekly, or yearly activity.

Analytics paves the way for real-time data that allows analysts to prepare real-time reports, enabling the management to make decisions in real-time and make changes that are in the best interest of the company, explains one of the top providers of financial reporting services.

5. Personalization

Just as we discussed above, clients demand personalized solutions from their accountants since they are aware of exactly what they want. With analytics, real-time financial data of customer demands and behaviour is collected, letting business owners make personalized offers to individual clients, organizations, and families in a cost-effective manner.

This is crucial since the “one size fits all” business models do not work anymore. If we talk about the most successful businesses, they have custom financial dashboards in place that focus on essential KPIs to streamline the reports for the executive team, helping them serve clients in a personalized way.

6. Combating Financial Fraud

One of the major concerns that businesses have is that of financial fraud, and it is not just about the people outside the business but also about the people who work within the company. In order to combat financial fraud, it is recommended to make use of the blockchain technology comprising a digital ledger that maintains entire transactions and payments online. As soon as any transaction is processed, it is recorded online, and instant notifications are sent to both parties that can be reconciled easily using artificial intelligence, leaving no scope of fraud.

7. Enhanced Client Service

Digital accounting tools not only streamline the accounting processes but also bring down the manual efforts of the accountants and other employees. This leaves them with an ample amount of time to focus on providing enhanced client services since it is not just the personalized work that clients need; they want to be treated in a special manner. This is only possible when manual inspections at the accountant and management end are reduced, and they are able to spend time devising strategies in the form of offers, discounts, etc., to make clients feel special in order to retain them in the long run.

Conclusion

We hope that now you have become familiar with the benefits associated with digitizing your accounting and finance processes. Businesses need to realize this that it is not an alternative anymore but a requirement to sustain in the ever-changing competitive market scenario. With digitalization, they will not only be able to refine and redefine their internal processes but save a huge amount of time to focus on making strategies for growth, scalability, and providing enhanced customer service.

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Tracy Watson

4 thoughts on “The Dawn of the New Era of Digital Transformation in Finance and Accounting

    1. Companies that aren’t getting on board with digital are going to find themselves (if they aren’t already) far behind their competition very quickly. Thanks for the comment!

    1. It’s so true. We live in a digital world, even more so now than before with the pandemic in our midst leading to increases in working from home as well as people communicating virtually instead of in person. Thanks for the comment!

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