The corporate accountant has gone through a dramatic transformation over the course of the last decade, and that change is only accelerating thanks to the adoption of sophisticated technologies like robotics process automation (RPA) swooping in to tackle the most tedious tasks.
“For the new wave of accountants that are graduating from college, the expectation that they will have a job where they’re processing spreadsheets all day long is no longer their expectation,” he told PYMNTS. “They’re looking to be strategic and analytical.”
But the enterprise itself is changing, too.
Organizations are embracing new business models that impact workflows on both the accounts payable (AP) and accounts receivable (AR) side of B2B payments. Business is moving at lightning speed, creating greater pressure for finance leaders to obtain access to data in real time. And while data entry may no longer be an accountants’ biggest pain point, new ones are cropping up quickly.
Covering the Time Gaps
Corporate financial management today often relies on professionals having access to the most up-to-date information on demand. Data automation and integration has helped accountants in their pursuit of instant information, but as Ty explained, certain workflows are not as easy to automate as others.
“What a lot of people don’t understand in the corporate accounting world is that when transactions are being processed on the front lines, there is a translation that happens between that point, and when the numbers hit the P&L,” he said, referring to profit and loss statements. “What people are sometimes misled to believe is that the moment you have a cash sale, the right amount is reflected in your financial statements — but that’s far from the truth.
Certified public accountants (CPAs) must take data from sources like invoices, and convert that to align with industry standards, such as ASC 606 revenue recognition standards. It’s a process that takes time and can stand in the way of an accountant’s need for real-time data.
This is far from the only area of the accounting and reporting workflow that suffers from these gaps, Ty noted.
Increasingly, one of the biggest pain points among accountants involves the accruals accounting process. It’s a workflow that requires accountants to record expected expenses or revenue before any money has actually changed hands.
In this regard, said Ty, accountants are “looking for automation to help them see what they can’t see,” with accruals forcing these finance leaders to forecast precisely to promote transparency and compliance.
Even in a world where expenses and revenue may be more predictable thanks to the growing adoption of recurring revenue models, there will always be a gap between the moment a transaction occurs, and the moment an invoice is received with information about that transaction, or a gap in time as a vendor calculates usage and billing.
While these time gaps have always occurred, the pressure on accountants to narrow those pauses continues to intensify. But there are plenty of other friction points that stand in the way of connecting accountants to the right data as quickly as possible.
Opportunities to misread invoice data or incorrectly input that information into systems are aplenty. For instance, Ty pointed to the risk of identifying the wrong date on a bill, which might contain both the date the invoice was generated as well as the dates of service. Such errors will have long-term impacts further down the accounting stream.
“Getting the data right up front is an important step to effective strategy and insight,” he said. “A lot of [artificial intelligence (AI)] and learning-type tools give CFOs better insight, but without that data going in right the first time, it’s ‘garbage in, garbage out.’”
With subscription, recurring and usage-based billing models proliferating, accountants are facing major changes to the timing and method of financial data and money flowing in and out of the enterprise.
But accepting errors is not an option in this profession. Transparency and compliance are essential, even in an environment of data overload, timing gaps and inconsistencies in the ways businesses exchange information. As such, embracing technology that can not only automate, but ebb and flow with an organization as it changes, is crucial to arming accountants with the most effective technology.
“You can’t just build this rigid framework and expect that automation solution will apply to you even a quarter or two quarters from now,” Ty said. “Business models and dynamics change.”
May 13, 2021 at 01:00PM