The Future of Finance Will Be Driven by Data
If your accounting firm or financial department isn’t providing more than traditional financial reporting, it risks being left behind. Traditional reporting is out of place in the data-driven world we now live in. New accounting technologies can help you efficiently deliver traditional finance functions and provide business leaders with better insights that support informed decision-making. Using these tools, you can transform your role into that of a trusted partner who works alongside business leaders to help them grow their businesses.
Traditional financial reports like simple variable analysis, profit-and-loss statements, balance sheets, and cash flow analysis are no longer enough in modern business. Company leaders are looking for more, or they soon will be. They want in-depth insights that will allow them to unite their business processes with long-term value. They want scenario modeling to understand how changes will affect their business and how best to allocate resources.
CFOs are increasingly becoming involved in their companies’ strategic decisions. According to a survey by McKinsey, 4 in 10 CFOs spend more time on strategy, transformations, and other areas than they do on actual finance. It is also an age of digitization, increasing customer expectations, and stakeholder focus on environmental, social, and governance issues. To keep up with all their growing responsibilities, CFOs need the right insights to help them optimize business actions and investments to drive the desired outcomes, and these insights are data-driven.
The finance department of the future will spend most of its time building operational KPIs that are mapped to real-time financial data and provide more value than in the past by supporting well-informed decision-making. Here are three essential areas of business value and how the finance department will be able to deliver these types of insights:
- Core value: This is the traditional view of finance. It is centered on the key financial statements and KPIs related to it. By default, a finance department should provide these insights already, but they can be improved. Reports can be delivered more quickly and accurately with accounting automation and real-time dashboards.
- Enterprise-wide value: The finance department won’t just rely on financial data for insights but will use operational data from across the business to comprehend how operational metrics relate to value and how they can be optimized.
- ESG value: Stakeholders are increasingly concerned about environmental, social, and governance issues, and it is up to the finance department to measure these non-financials and track progress.
Using the Right Tools
A finance department or an accounting firm can provide this type of value and take a more active role in driving business strategy, assessing options, and directing the use of resources across a business. But they won’t be able to do it with the traditional tools. And finance professionals will have to be prepared for their new roles.
To transform your finance department into one that is ready for the future, you need to look at three things:
- Staff capabilities: Your current staff is financially literate and knowledgeable about the business world. But they will need more skills for this shift. They will have to become technically literate and embrace agile working skills.
- Data and processes: Data is key to this change, and manual processes are out. Accounting automation will have to be the norm to provide the real-time insights businesses are looking for.
- Technology: A finance department of the future will also need to take advantage of modern accounting technology. Machine learning and AI might be something to consider if you want to provide the type of insights you otherwise might not discover.
Leading the Way
Finance will lead the way in the modern, data-driven business world. As automation removes the need for human employees to handle traditional accounting functions, accounting professionals don’t have to worry. Instead of being responsible for transactional activities and data entry, which can be handled with automation, they will have the more strategic role of guiding the business toward success.
By partnering with PathQuest, your firm can be ready for the future of finance. SCALE, PathQuest’s automated accounting solution, integrates with platforms like Xero, QuickBooks, and Intact so that client data is always up to date and there is an end to manual processes. SCALE comes with PathQuest BI, our accounting business intelligence software. That means you can put this data to work for business leaders in custom financial dashboards that update when their data does. And to help you focus more on being a trusted advisor for business leaders, SCALE also comes with a dedicated accounting team to take some of the work off your plate.
Thinking about how to get started with PathQuest SCALE? Let us assist you.