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The future of accounting - The impact of predictive tech and other important factors

29 september, 2020

4 MIN LÄSTID

This is the first article in our new article series about the future of the finance department and accounting. We regularly publish interviews, articles and case studies. Most articles are written in Swedish. If you are curious about the future of accounting and want to know more about how PE Accounting keep pushing the industry forward, dont hestitate to get in touch with us.
 

Kidbrooke is one of Sweden’s leading developers of financial APIs with many years of experience within the fields of financial mathematics, predictive technology and software development in the context of large projects within banks and insurers. Today we meet Kidbrooke’s head of business development, Zaliia Gindullina to discuss the future of the accounting function.

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How do predictive tech and other factors change the future accounting function?

- Although there are multiple different factors contributing to continuous evolution of roles within the corporate financial departments, we believe that technological innovation is likely to manifest itself both as a catalyst and as a response to other exogenous triggers. Therefore, we believe that the skill set of tomorrow’s financial department employee is likely to combine expertise in finance, economics, statistics and computer science.

Will robots replace us?

- Despite the rise of artificial intelligence, we do not think that technology would replace human labour in the short-to-medium term. However, it is very likely to expand the breadth of human capabilities and efficiency by unparalleled availability of high-quality data-driven decision-support.

To start with, we anticipate that the overarching regulatory trend of increased transparency (which is particularly prominent within the financial industry, but surely extends itself to other sectors of the economy) would constitute a significant data challenge for the financial functions.

Therefore, it is likely that the accountants of the future would be prompted to operate advanced technological tools to prepare, analyse, alter, summarize and predict considerable quantities of financial and text data.

We have already seen some creative manifestations of this trend in our work. For instance, one of our clients, a corporate pension consultancy, leverages our predictive analytics to overcome the common data challenges and automate the complex calculations of corporate pensions, allowing their highly qualified staff to concentrate on less monotonous work requiring a higher degree of professional judgement.

How will Covid-19 and other recession factors affect the finance function?

- Covid-19 and the impending recession is likely to influence the corporate financial functions to look into automating as many processes as possible in order to reassign their human resources to more strategic, value-adding tasks.

As a result, the emphasis of their work could shift from recording, summarising and reporting to analysing and interpreting financial data. For example, the manual process of managing payables and receivables within the organisation could be empowered by powerful stochastic simulations of these balance sheet items e.g. including default and late-payment risks.

These predictions would equip the financial professionals with premium liquidity management insights within seconds, which could ensure that any arising liquidity issues would be met with well-informed and timely action.

Will the future finance department accept traditional office hours?

- The rise of the remote economy is likely to foster more trust in automated systems and therefore accelerate the widespread digitalisation trend. As artificial intelligence and advanced statistics gradually become a vital part of the financial major curriculums, the entrance of millennials and digital-native generation Z into the workforce is likely to popularise the application of machine learning methods in the typical workflow of accounting departments.

Is sustainability something to consider?

- Yes, finance and accounting will not be able to avoid the impact of climate change, highlighting the importance of the Corporate Sustainability and Responsibility (CSR) performance as a measure of the entity’s contribution to its stakeholders.

It is likely that the role of accounting departments would be broadened to analyse, summarise report and control the entities’ performance within the material CSR factors. As of today, there are no standardised benchmarks within this field, so this sector is still emerging and, in our view, has a huge potential to be a focus for the accounting profession of the future.

Will the need for qualified finance and accounting professionals decrease?

- It is common to perceive technological progress with a degree of caution, and it is fair to an extent - there are historical examples of the entire industries succumbing to creative destruction. However, we believe that albeit the changes, the financial departments would not disappear just yet.

Before pivoting to providing the APIs, Kidbrooke has had a long history of leading large transformational projects within the financial services industry. In most cases automation eliminates repetitive, monotonous tasks from the daily routines of the employees, leaving more capacity for jobs requiring creativity, problem-solving, emotional intelligence and professional judgement.

Given the breadth of use of the financial data and its significance for strategic decision-making, it is very unlikely that the need for qualified financial professionals would cease any time soon.

How important is the companies choice of finance and accounting systems?

- In the long run, all systems, agencies and inhouse functions will have to adapt to new technologies or disappear. I believe the best strategy is to stay informed on what possibilities technology presents today, tomorrow and in the near future.

Progressive ERP systems and skilled teams such as those at PE Accounting and advanced predictive technology summarised in accessible APIs from companies like Kidbrooke will continue to push the finance industry forward.
 
Any financial director or accountant who wishes to future-proof their organisations and careers should be aware of the continuous change brought by ever-evolving technology, whether you choose to use our services or not. It is a matter of securing your success for many years to come.
 
 

Start your transformation journey now!

In 2011 PE Accounting created the first automated economy-/ERP system in Sweden. The goal was and remains: to let companies make better decisions with real time updated data, with focus on adding value and minimizing manual administration. ​
 
We offer a combination of our ERP-system and accounting service.  Here are  the top 6 quick perks with accounting automation and service from PE Accounting:
  • Only one ERP-system instead of many different systems for finance and accounting.
  • The support from dedicated accounting consultants is included.
  • Advanced automation: creating flawless processes for everything from time- and expense reporting to invoice administration, accounting and reports.
  • Real time updated reports with drill down functionality.
  • You can focus 100% on your business and continue growing, using the same ERP-system and accounting service from 5 to 500 employees.
  • You only pay a preset amount every month, no extra costs added if you need more help.  

Currently there are more than 800 Swedish companies with over 20.000 users using PE Accounting and we are steadily growing every month.

Let us help you get started with your transformation journey. 
 
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