The Future of Financial Reporting10/08/2019
Armies of accounting and finance professionals put together and deliver reports and presentations every month, only to do it over again the following month. While it would be perfect if the reports aligned with the changing needs of the business, that seldom happens with financial reporting.
48 percent of companies spend their time creating and updating reports vs. 18 percent of the time is spent communicating the results to the company. Companies know that there is room for improvement and a majority of companies use standardization for a fast and efficient way to gain more insights.
This begs the question- how would standardization react to automation? If standardization can be such a great and powerful performance tool now, how would it react to adding artificial intelligence (AI) into the mix?
Progress is Already Happening
Today, companies are applying point solutions to traditional reporting processes while others are using AI to write narratives about financial data. There are also companies moving towards a continuous close and get rid of latency.
As of yet, no company has cracked the code or joined together different technologies across the entire end-to-end reporting process in a way that is dynamic and contains real-time insights.
As more demands for change are made, considerations should be taken to include the overall costs and savings of a company. Companies can release more efficient reports and significantly reduce human labor. Customer demand will also drive a reporting overhaul that influences self-service persona-based reporting that generates important information in a short amount of time.
Future Changes to Financial Reporting
We know that the nature of this work will change in the future and that the laborious grind of financial reporting and management will likely not exist in the future. People will be seen as insight generators and not report builders, and the talent pool will extend to business people with finance backgrounds and others that collectively- can enhance the financial ability to support the company’s strategy.
Upcoming Transformations to Financial Reporting:
- Financial reporting will be intelligent.
CFOs can jumpstart this revolution by applying digital technology to financial reporting now using the best practices and technologies available.
- Design data platforms that can evolve to support both structured and unstructured data.
- Focus on your customers by requesting feedback and watching what they do, allowing you to build the perfect user experience accurately.
- Make small steps with changes and updates before implementing them on a larger scale.
- Work with employees to reassure them of their human skills as they adjust to the adoption of automation.
- A CFO should bring new ideas to the C-suite, helping the other leaders to adopt technological innovations can help the business without jeopardizing further progress.
Most CFOs are well aware that changes are coming for financial reporting. In 2018, CFO Signals reports that 63% of CFOs projected the changes in the financial workplace would likely shift in three years towards analysis, prediction, and decision support. About 66% agreed that technology advance would help to gain significant productivity in accounting, reporting, and compliance processes.
Remember that reporting isn’t about technology and that it is about understanding and leveraging information companywide. While new tools might make the workflow easier, human intelligence is still an indispensable resource. As such, CFOs should be required to rethink how they strategically deploy their own tools and talents to incorporate data and analytics into decision making.