The evolution of accounting and the role of cloud-based technology

Accounting is no longer just about crunching numbers and ensuring accuracy. Thanks to a fast-evolving regulatory landscape driven by emerging business trends and technological innovation, it continues to undergo a significant transformation. With changes accelerating all the time, accounting teams are exploring new ways to collaborate and push organisations to consider cloud-based technologies. As transactional work becomes automated, accountants are being asked to use their financial expertise, now with a greater emphasis on understanding business processes, automation, and data analytics. Here, we explore the changes impacting accounting professionals and organisations, and how businesses can support their teams in a more strategic capacity.

Regulatory changes

Managing financial disclosures continues to be a concern for public and large private companies, particularly when it comes to being compliant with financial regulations and audit requirements. The pandemic has also introduced a new complexity with government stimulus programs and changing disclosure requirements for Environmental, Social, and Corporate Governance (ESG). In addition, accounting teams must keep up with changes in tax policy, statutory and regulatory changes. For instance, the European Union has recently enacted regulations related to ESG, including the Sustainable Finance Disclosure Regulation (SFDR) and the Sustainable Disclosure Requirements (SDR), which commands the disclosure of climate-related financial risks and greenhouse gas emissions.

Accounting teams must not only keep abreast of accounting standards prescribed by The Financial Reporting Council (FRC), but also remain compliant with other reporting requirements that are constantly evolving. This includes the International Financial Reporting Standard 9, issued by the International Accounting Standards Boards, which introduced an expected credit loss (ECL) approach in July 2014.

Trends

There are several trends driving the transformation of the accounting profession towards a more strategic advisory role: the shift towards a remote close, the adoption of continuous accounting practices, and more frequent financial forecasting. Continuous accounting involves automating tasks that are traditionally done at the end of a period and embedding them into a company’s day-to-day activities, resulting in improved efficiency, data integrity, and compliance. Improved financial modelling and forecasting, enabled by budgeting, forecasting and planning software, data analytics, and visualisation tools, is also contributing to the shift towards a more proactive and analytical approach to accounting. Furthermore, the recent shift to increased home working presents challenges such as the need for collaborative communication and cloud-based file sharing tools, and an increased risk of cyberattacks.

Impactful technologies

Technological innovation is also driving change across the accounting profession. Cloud-based technologies are expected to account for more than 45% of IT spending by 2024, and accounting software is often included in this. Real-time analytics and Artificial Intelligence (AI) require a clean and secure data infrastructure, which is difficult to achieve with outdated on-premises accounting systems. AI can be used to automate mundane, repeatable tasks and to extract insights from information generated by new technologies, allowing accountants to focus on higher-value activities and play a more strategic role. Data-driven and proactive accounting teams can use business intelligence and analytics tools to make better decisions and provide the right data at the right time to internal stakeholders or clients.

The Institute of Management Accountants (IMA) has launched a Data Analytics & Visualisation Fundamentals Certificate to equip accounting professionals with the skills needed to advance business strategy. Financial management software with strong analytics capabilities can automate data collection and analysis, freeing up accountants to make more strategic contributions and minimise errors. Robotics process automation (RPA) can also automate tasks, freeing up time for higher-value work while improving efficiency.

The role of the accountant is shifting and investing in the right financial management systems is essential to keeping up with these developments (and future ones). Oracle NetSuite’s cloud-based solution delivers all the functionality accountants need to adapt, with automatic bi-annual updates to help with regulatory changes and emerging trends, as well as built-in reporting tools for improved transparency, and add-on modules for planning, budgeting and advanced analytics. Its data centres also adhere to leading cybersecurity protocols. All of this gives accounting departments a true understanding of a company’s performance and enables them to weigh in on strategic decisions and establish themselves as key partners.

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Ian Robertson is the Sales and marketing director of BrightBridge, a UK-based technology consultancy offering Oracle NetSuite and Microsoft Dynamics 365 solutions. Ian has over 30 years of experience in ERP and CRM implementations. Prior to forming BrightBridge, Ian worked for a major US IT corporation, where he acquired a depth of knowledge around time saving efficiencies through technological integration and automation. Follow BrightBridge on LinkedIn – https://www.linkedin.com/company/brightbridge-uk and Twitter – https://twitter.com/brightbridge_uk