Your Firm and Your Clients’ Data Simplifying the Future of Accounting

A June 2, 2022, article posted by the CPA Practice Advisor and written by Randy Johnston, says that the past two years have been anything but simple. “So, it may seem ironic,” he writes, “that simplification is the new way to navigate the increasing complexity of the business. Automated, digital solutions provide a pathway to alleviate this pressure while helping decision-makers pivot quickly in rapidly changing environments.”

Johnston points out that, as tax season finishes, a series of trends in the accounting profession has emerged to inform the best growth strategies for business in 2022:

  • Automation of financial processes.
  • Increased cross-departmental collaboration.
  • Enterprise-wide digital transformation informed through data unification, Artificial Intelligence (AI) & Machine Learning (ML) and cloud adoption.
  • Business performance measurement paired with companies' willingness to streamline financial planning and analysis through innovative, easy-to-use technology.

Of all the trends observed, he notes, digital transformation is one of the most long-standing, most well-known and essential strategies to keep pace with increasing complexity. “Of course, automation will never replace human input; but it will enhance it. And it is the first step to truly embracing digital transformation.”

Johnston points to a study of financial data management, where Gartner predicts that 70% of new financial planning and analysis (FP&A) projects are destined to become extended planning and analysis (xP&A) projects by 2024. “That means that overall business planning will go beyond the Office of Finance, requiring Finance's increased collaboration with the rest of the enterprise. As a result, modern tools and more efficient processes that provide better cross-departmental insights will be essential.”

In the past, financial planning & analysis fell under the rubric of planning, budgeting, forecasting, and performance management. However, the challenges of the past two years have illustrated the importance of embracing in FP&A what digital transformation offers to cross-functional planning and analysis for more efficient collaboration beyond the Finance function.

As we all know, he says, “the world is still very much in recovery mode after a debilitating pandemic. But, as we look to the future, there is a reason for hope. With this forward-thinking mindset, the focus for the accounting profession in 2022 will be on automating planning and budgeting functions across the organization to be appropriately equipped to implement digital transformation.”

Johnston advises that digital transformation is a journey, not a quick sprint. “By analyzing milestones unique to your organization, decision-makers can identify which stage they are in toward a full-blown digital revolution.”

 

Digital readiness can be measured by looking at company culture, existing structures and desired automated targets. For a guide you can use to check your own organization's readiness, see Your Firm and Your Clients’ Data - Simplifying the Future of Accounting | CPA Practice Advisor.