SWTCH by Pigment
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SWTCH by Pigment
Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more
Register now here
By Emmanuel Jibodu, Finance Analytics @ Shred-it
The Boston Consulting Group (BCG) predicts that by 2025, up to a quarter of jobs will be replaced by either smart software or robots. There are numerous articles being written, nowadays, on the plight of several professions — lawyers, financial advisors, accountants, etc., because of robo-lawyers, robo-advisors, and robo-accountants. A robo-accountant is NOT necessarily a robot with arms and legs from a science fiction movie; and, in the context of finance & accounting (F&A), the term can be ascribed to software that performs F&A processes.
The genesis of robo-accountants stems from the digital transformation (digitization) that occurred in The Office of Finance, of modern organizations, as a result of journal entries, T-accounts, etc., on paper-based accounting records being replaced.
Robo-accountants comprise of software that are being used by companies to perform the whole gamut of F&A processes. Robo-accountants typically comprise:
A. The finance module of an Enterprise Resource Planning (ERP) system. An example of such an ERP module is: SAP's Finance module. World class ERP finance modules offer mid-size or larger companies an unparalleled means of tackling the nuts and bolts of accounting. An ERP's Finance module, for example, handles processes such as — verifying the journal entries and sub-ledger tie outs during the accounting cycle.
B. Purpose-built Corporate Performance Management (CPM) tools that are utilized for an enterprise's planning, budgeting, forecasting, financial consolidation, analytics, financial/management reporting, and scorecards. An example of a best of breed tool in this category is: IBM COGNOS TM1. The tool comprises of a web-based architecture, multiple user interfaces (Microsoft Excel, web, mobile, desktop) and offers a robust solution that is flexible for the needs of almost every industry vertical.
C. Enhanced Finance Controls & Automation (EFCA) software that assist companies decrease the time and resources required to execute the month-end close process and automate the "last mile of finance."
Recently, I came across an article in the Wall Street Journal that stated that the median number of full-time employees in the finance department at large companies had decreased by 40%, from levels in 2004. Being able to do debits, credits, and other back office functions does not suffice for F&A professionals anymore, as ERPs and finance automation software can do 99% of that, and assist companies close their books faster. No more overwrought accountants at month-end trying to close the books as a result of error-prone manual processes that F&A professionals have become inured to.
Robo- Accountants have engendered a myriad of benefits for The Office of Finance. These benefits can be divided into, mainly, two categories: (1) Processes (2) People
1. Processes: Robo-accountants have markedly improved an organization's finance & accounting processes in the following ways:
2. People: Robo-Accountants have impacted the human capital that compose The Office of Finance, positively, in the following ways:
Skeptics would posit that robo-accountants and smart software are taking the jobs of top-notch F&A talent. This is a valid argument. In my next post, I will delve deeper into the contributions that F&A professionals can still make to the performance of their organizations, amid the automation and digitization frenzy that has swept the world economy. In fact, a Mckinsey study puts automation in the top three priorities of the C-Suite.
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