When they asked me to write a blog about the shift from traditional to modern accounting, I wondered what message my readers should get to differentiate my post from the many others. My blog post idea was to inspire people to co-shape their ideas and do what Dynatos stands for: “Being a trusted advisor.”
Back to my topic then: Continuous Accounting. It is a revolutionary way for finance organizations to reduce costs and risks of accounting errors and liberate accountants to provide value-added analysis. It transforms the accounting department from a strict processing environment to an agile department where near real-time data back analytics and business-driven decisions. By virtually closing books at the business pace, CFOs can access financial data to make informed capital decisions that seize momentum and evade market risks. CFOs become the most valuable strategic advisors to CEOs.
Companies implementing Financial Process Automation principles will realize competitive gains from the ability to forecast more accurately than market peers. It all comes down to the following statement: If you can determine what your company’s state is earlier than at the end of the accounting period, your financial decisions are aligned with your business performance, and your resources are better optimized.
These are just some of the benefits of process automation; others include improved data accuracy through process automation, high efficiency, lower labor costs, and more engaged accountants. Towards the closing of the accounting period, accountants suffer under these short, high-pressure deadlines, with most of the work compressed into a low number of days. For the rest of the time, they recover from stress. Do you get the best of them under these circumstances? And do they love what they do? With certainty, the answer is negative, as they need to get the time to do what they love most: understanding numbers to advise senior leaders to drive the business forward.
Reshaping
The principles of modern accounting were developed in the early 1800s—that’s right, the 1800s. This record-to-report model—an accounting cycle that starts with the booking of transactions and concludes with the publication of the financial statements—remained solidly in place.
The globalization waves, the internet, digitized data, and mobile applications have reshaped how business is conducted. In this fast-paced global economy, the record-to-report process cannot keep pace. Having a powerful engine and not the means to track the speed with an odometer contradicts our natural behavior in completing the proportionality rule.
Still, most finance organizations work with rigid accounting systems. Accountants will admit to the hardships of their period-end tasks, working long days into evenings, eating dinner at their desks – exhausted, they’re more likely to make errors at a time when data accuracy counts most—combined with the pressure on the finance directors to identify potential risks which are not easy without accurate financial data. And the financial planning and budgeting are still forced to wait until the end of the month to build these forecasts – instead of having day-to-day abilities to fetch near real-time data.
Financial Process Automation neutralizes these experiences. Thanks to the automation of traditional accounting tasks like journal entries, variance analysis, account reconciliations, and intercompany transactions, the period-end tasks and controls traditionally performed at the end of the accounting cycle are executed in the cloud as the days go by. Instead of bringing up all of the data in one batch process as before, the batch is split up into smaller tasks scheduled early in the accounting period process and embedded in the accountants’ daily workflow.
Completing these elements becomes routine, with the tasks broken down into smaller bits. Accountants now have the means to close the books virtually daily, diminishing the strain they normally experience during the closing process.
Don’t do fence sitting. Break free from the traditional process and modernize your financial organization with Dynatos empowered by Kofax Readsoft.
