This is a blog post from our partner Workday Adaptive Planning. Philippa Lawrence, chief accounting officer and vice president at Workday, highlights some interesting trends emerging in finance and accounting.
The past few years have given us a deep appreciation for how quickly the unexpected can upend our assumptions. And there’s no question that uncertainty—around everything from inflation and macroeconomic volatility to geopolitical tensions and regulatory shifts—has dominated discussions at organizations in all industries and regions.
Still, some emerging trends within the accounting field have gained such momentum in recent years that continued acceleration in 2023 seems all but certain. As accounting leaders look to the year ahead, here are three predictions about the seismic shifts reshaping the finance function—and why leaders would be wise to lean into these trends sooner rather than later.
1. Your Technology Strategy Will Become Your Talent Strategy
Hiring and retaining talent is one of the top challenges CFOs will face, and understanding what employees want can help ease that challenge. For many, the answer is meaningful work, and CFOs know technology plays a role in this. A global survey of 260 CFOs found that nearly half (48%) plan to invest in technology to streamline finance tasks. Even more striking, nearly all (99%) of those making technology a priority agree that technology updates will become even more important for both attracting and retaining employees.
For finance and accounting teams, doing meaningful work is about doing more than manual data aggregation or managing clunky spreadsheets day in and day out. Technology can automate manual processes such as these, enabling staff to focus on more value-added work, such as identifying trends from the data to help the business understand the “why” behind the numbers. And this will become increasingly crucial in a talent market where skilled finance workers are at an all-time premium. According to Deloitte, 82.4% of public company hiring managers for finance and accounting report talent retention as a big challenge. Investing in technologies that automate core processes and streamline user experience will be paramount to building—and retaining—a skilled and agile finance team.
2. The Journey to Zero-Day Close Will Drive Further Adoption of Accounting Automation Through Artificial Intelligence and Machine Learning
Traditionally, reconciling financial statements at the end of a reporting period—whether monthly, quarterly, or annually—has been a labor-intensive process that can take weeks to complete. But an arduous, lengthy close isn’t only a resource drain; it also slows the speed at which data can be analyzed and information gets into the hands of decision-makers. This is a critical vulnerability in today’s business environment of high uncertainty and rapid change, where actionable information is rapidly perishable.
But one of accounting’s most ambitious goals aims to change that: A zero-day close leverages intelligent automation and continuously available, up-to-date information to close the books at any time, dramatically accelerating the pace of internal reporting and data analysis. No wonder 86% of finance executives say they’ve set their sights on achieving a faster, real-time close by 2025, according to Gartner, with more than half of respondents already deploying investments such as general ledger technology and workflow automation.
While a zero-day close is the ultimate goal, every incremental step toward that goal—such as automating manual data entry for invoices or manual journal creation—drives day-to-day process improvements that truly advance the finance function. My team is currently on the journey to achieving a zero-day close. With the help of artificial intelligence (AI) and machine learning (ML) in our system, we’ve achieved nearly 100% billing accuracy and 100% automation of our cash flow, and the percentage of manual journal entries we now perform is incredibly low. When anomalies arise, they’re surfaced swiftly so we can address them well before they impact the close.
3. Accounting Will Increasingly Act as a Value-Creation Partner to the Business
In an increasingly complex and interconnected business environment, C-suite leaders recognize that real-time, data-driven decision-making is more important than ever. And while accounting has traditionally been considered a numbers-only profession focused on historical data, technology and transformation have repositioned accounting at the center of strategic decision-making and value creation. For example, accounting leaders are playing a critical role in driving an organization’s environmental, social, and governance (ESG) strategy by leveraging technology to analyze data, surface insights, and influence ESG investment decisions.
Whether highlighting the financial implications of operational and strategic decisions, recognizing red flags and inefficiencies, or evaluating opportunities to reposition investments or improve performance, technology is empowering accounting teams to quickly discover real-time insights and analyze the drivers behind the data. Our value as accountants is increasingly demonstrated by our ability to share insights and collaborate with other business functions to ultimately guide strategic planning and decision-making.
The trends reshaping the accounting and finance professions aren’t wholly separate from the larger economic uncertainty and business volatility in which organizations operate today. In many ways, the urgent need for better adaptability and resilience has accelerated the profound shifts underway in how accounting works, contributes, and collaborates across the business. For those in accounting and finance, it looks to be an exhilarating and impactful year ahead. And we’re just getting started.
This article originally appeared in The Journal of Accountancy. ©2023 Association of International Certified Professional Accountants and was also published on the Workday blog.
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