The office of the CAO has become a busy place.
Chief Accounting Officers, whose normal responsibilities include overseeing the financial close and internal control environment, are now being challenged like never before due to disruption caused by the Covid-19 pandemic.
As KPMG notes, “The CAO sits at the center of the economic storm that is buffeting many companies. CAOs are helping their organisations work through falling revenue, liquidity issues, layoffs, and various cost-saving scenarios.”
“This gives CAOs an opportunity to play a key role in guiding companies through ongoing financial challenges, even as the disruption creates additional responsibilities in their ‘day job’—such as closing the books and managing internal controls over financial reporting in a virtual environment.”
Room for Growth
Even before Covid, the CAO’s role was expanding, notes Katherine Becraft, a financial close expert at BlackLine.
“CAOs are being entrusted with critical projects and working as strategic partners to the business,” she says. “They’ve been increasingly involved in activities such as enterprise risk management, mergers and acquisitions, and other business transformation projects.”
“Now, at a time when a major economic disruption has created new financial and control risks, their focus has been shifted away from their compliance responsibilities.”
Start at the Beginning
There’s no simple answer to such a complex array of challenges and opportunities, but Becraft does offer some advice: “CAOs should start at the beginning, at what KPMG refers to as their day job, to look for opportunities to create capacity within their organisation.”
Putting technology to use in bread-and-butter accounting processes—in financial closings and controls and compliance—will help free up capacity for the CAO to take on added responsibilities.
“A necessary first step is to advance the accounting function by embracing technology that can help expedite the most important accounting functions,” she says. “That’s what cloud-based process automation does—it addresses the middle of the record-to-report process, replacing manual spreadsheets, validations, and controls with automation.”
“It integrates key accounting processes with a single, unified store of data, adds automated workflows and control points throughout, and makes processes visible to authorised users. Process automation also has mechanisms to support continuous improvement, so the accounting function becomes even more efficient over time.”
Adding Reliability & Reducing Risk
Applying automation efficiencies to Accounting will help the organisation bring reliability to its financial forecasts and reduce the risks of financial misstatements. And, Becraft notes, it will help free up the CAO’s time to bring accounting knowledge to other aspects of a company’s operations.
KPMG agrees and offers some optimism: “By taking on new responsibility through these extraordinary times and adapting quickly to the new reality, CAOs are helping position their companies to survive and grow when the economy recovers.”
How to Thrive in an Era of Uncertainty & Change
Acknowledging that uncertainty is the new normal is a critical first step for accounting. Yet forward-thinking CAOs aren’t just acknowledging uncertainty—or even merely adapting to it. Instead, they’re proactively leveraging what seems like chaos to others into a strategic advantage.
And they’re doing so by engaging in these three key practices.
Using & Optimising New Technology
Accounting, like the rest of the world, is in the middle of a digital transformation. Yet while marketing, logistics, and sales have made the transition from paper-based systems to automated ones, accounting teams are still relying on manual tools, such as spreadsheets, Word docs, and binders, to manage much of the close.
These tools prohibit access to real-time data and stymie the necessary transition to modern accounting. Spreadsheets alone reduce efficiency while simultaneously increasing the likelihood of errors.
For Accounting, managing uncertainty starts with eliminating the use of tools that cause it. For CAOs, this means integrating more smart automation into every process. Engaging RPA—robotic process automation—for repetitive, tedious, manual tasks not only increases efficiency and accuracy but enables accountants to become less reactive and more visionary.
Elevating Accounting’s Role to Strategic Business Partner
Better information isn’t the only driver in this transformation. Leveraging uncertainty into a strategic advantage also requires transforming people and processes.
Automated, streamlined processes free people to focus on strategy creation and predictive and prescriptive analysis—work that enables Accounting to step into a true partnership role.
Driving the Evolution of the Accountant
Over the past decade, the accounting technology landscape has changed at a dizzying pace, with all indicators pointing to a faster pace of innovation.
Cloud computing has lowered the bar to deploying new apps. Robotic process automation is driving efficiency and consistency by applying business rules to eliminate high-volume tasks like reconciliations. Artificial intelligence, machine learning, and more recently, deep learning, are predicted to have an ever-increasing impact on Accounting departments.
These technologies are leading to the development of a robotic accounting department, and forward-thinking CAOs are excited about the opportunity to realise a much higher people ROI.
Join us for the Modern Accounting Summit on 18-19 May to take the next step in your modern accounting journey. You’ll discover leading practices to guide process transformation and accounting automation and learn how companies like yours are overcoming their greatest accounting challenges.