The beginning of a new year always signals a time for trend spotting Which financial opportunities, challenges and changes should companies prepare for now? Below are six soon-to-be realities that you should consider for 2019. .
CFOs take on more
The role of the CFO has merged with that of the COO to
assume strategy and operations functions. This calls for greater collaboration
in business areas such as marketing, procurement, sales and design/R&D in
order for CFOs to build sound budget strategies and operational processes.
demands disrupt industries.
Think of it as forced evolution. Millennials and Gen Z crowd
are making their wishes known – pushing for greater transparency, asking for more
sustainable products, embracing technical conveniences. Business has no choice
but to respond – re-evolving business models, selling on social media, adopting
finance smarter and faster.
Automation and new technologies are making finance software
programs do more with less. This leaves more time for focusing on the
organization’s strategic vision.
We’re grappling with uncertainty
From foreign policy to data regulation, businesses are
operating under the strain of uncertainty. Expect another year of having to
navigate a turbulent, highly politicized environment.
Even the workforce is
2019 will introduce a diverse generation of employees with
new expectations and wants. For accounting, the skills gap widens, re-training requirements
grow, and a higher level of contract employees emerges.
New data risks are
Companies will need to have a deeper understanding of General
Data Protection Regulation (GDPR), because there will be a higher level of
concern about data security as more info is created, collected, and stored online
which allows for the possibility of hacking.
As these developments proceed, the role of
finance becomes more important and extensive. Many companies are turning to service providers to help them make the
transformation. This may entail consulting services, augmenting current staff
or even outsourcing the financial and accounting function.
As automation, control, and period-end tasks are embedded within day-to-day activities, accountants are freed from manual work.
Freeing finance from manual work not only saves time that can be allocated to continuous process improvement and preventative controls, it also gives accountants access to game-changing, real-time data so they can provide analysis and business intelligence at the point of need.
Technology is disrupting the way business is run, and accountants need to reskill and upskill to meet the demands of both internal and external stakeholders.
- It’s an organization win.
Strategic accounting doesn’t just benefit finance. Access to and quick analysis of real-time data helps the entire organization become more agile, responsive, and proactive.
- Increased employee engagement and reduced hiring costs.
Bored, tired, burned out staff is a flight risk. But working on something meaningful, like strategy creation, increases engagement, investment, and ultimately, retention.
- Functioning as a strategic force.
Today, finance organizations have access to the real-time information that is so crucial to functioning strategically.
This creates the opportunity for accounting and finance teams to function as a strategic force in the organization. CFOs, controllers, and other accounting leaders can now help the business act proactively instead of reactively by providing up-to-the-minute analysis and intelligence.
The Path to Success In the Modern Marketplace
Implementing necessary technologies can be expensive. Documenting current state and designing desired future state and is often time consuming. As a result, companies are turning to service providers to help with the process. This may entail a consulting project, augmenting current staff or even becoming the finance and accounting department.
Founders create businesses because they have a passion or expertise in providing particular goods or services to market and often get caught up on focusing on items outside of their expertise. Being a startup means there’s always more work to do, and not enough time to do it. It is easy to get caught in numerous non-value add tasks that take anyway from working on the business. That’s why most success startups outsource certain tasks to companies or individuals who specialize in providing valuable time-saving services for a fee.
With all the advancements in technology, it’s easier and more convenient than ever to outsource. Here are five things you should consider outsourcing to experts.
1. Accounting & Finance
Most entrepreneurs are not Accountants. However, understanding cash flows or analyzing profitability of a business is vital to its success. Too often startups neglect building an accounting process until profits go downhill or cash slowly drains away. Setting up an accounting process for your startup is critical to the long-term success. An accounting process is also important because it allows your business to look forward. Startups or small businesses that that don’t have an accounting process in place find themselves trapped by past actions or constantly worried about having enough money to pay bills.
In addition to accounting process, setting up an accounting system is important for your startup as it will allow you to see how your business is doing and allow you to make decisions to strategically position your business for growth.
Look for a firm that does more than just bookkeeping. Partnering with someone that goes beyond debits and credits and gives advice on such things as cashflow will help set you up for success. Technology is vital to help provide necessary insights.
2. Graphic Design and Web Development.
Coming up with a brand-defining logo, an attractive website, and print materials can be extremely time consuming and difficult to get right. Using a professional graphic designer will help your business look its best. They understand a lot of things that you may overlook. Whatever your goals, there’s a graphic designer with the talent, aesthetic sensibilities, and visual skills to fulfill your vision and enhance your company brand.
Look for a graphic designer that offers web development to help streamline the process and provide a unified message.
3. Web Research.
Prospecting for new business and keeping up with the latest developments in your industry can be time consuming and daunting. A web researcher can research information you, whether it’s gathering information and statistics for an upcoming presentation or looking up the names of companies and contacts for a leads list. They can also organize this material in a form that’s easy to use and read.
4. Administrative Assistance.
If half your day is spent sifting through your overflowing email inbox, returning call and making travel arrangement, a virtual administrative assistant (VA) may be just what you need to streamline that frustrating process and keep you from being inundated by a constant stream of on administrative tasks that keep you from more value-added items.
Before you waste your time on something that is not in your expertise, consider outsourcing. This will make your to-do list shorter and free you up to focus on the things you’re best at and that generate the most income for your business.
Technology is Transforming Accounting & Finance
The Association of Chartered Certified Accountants (ACCA) recently came out with a report last month showcasing technology’s role in the future of finance. The report concludes that technology can revolutionize finance and accounting.
Technology has played a role in Accounting and Finance for numerous years. Originally, most software was targeted to large enterprise due to its cost and complexity. The cloud drastically changed the landscape by bringing enterprise type technologies to the SME market. Now 80% of CFOs have cloud as part of their technology roadmap. Here are the benefits technology brings as identified in an ACCA survey of CFOs:
- Improving efficiency and productivity – 70%
- Creating new value for a business – 53%
- Reducing costs – 33%
- Improving communication internally and externally – 20%
- Improving quality and standardization – 20%
As technology advances the above numbers will even be higher. Software companies have already begun to use artificial intelligence and machine learning.
Even though the returns can be great, it is important to be cautious about guaranteeing huge returns or overnight results. The report warns CFOs to use caution about where, when, and how they do or do not implement new technology.
A Technology Roadmap is Key
Technology is not automatically the solution. You need to understand your business goals and processes. Automating a bad process doesn’t fix anything. Implementing the wrong technology can be catastrophic and can possibly lead to employee turnover and insurmountable costs.
Companies shouldn’t rush into a decision, but also there is a lot of risk in not embracing technology and being left behind. The solution is to create a defined technology roadmap. A technology roadmap is a document which outlines the plan to reach short-term and long-term goals through the use of technology solutions. This type of roadmap typically provides key information which helps organizations make better decisions around technology investments.
Technology roadmaps are often driven by IT. However, it is important for CFOs and other business executives to be involved. They are the ones that understand short and long-term goals. Lavoie CPA continuously studies and evaluates technology. We also have the business acumen to apply the right technology correctly. Need help with a technology roadmap or software evaluation, give us a call.