Cash News
Robert MichlewiczCEO, Visual Lease.
The office of finance continues to undergo a profound digital transformation driven by evolving regulatory requirements, ongoing talent shortages, increased burnout and changing market conditions.
According to a February 2024 Gartner Inc. study, 73% of accountants said regulations passed in the last three years have increased their workload, while 82% attributed the growing demands on their time to economic volatility. We have seen before—and will likely continue to see—that these new responsibilities and factors can lead to costly mistakes; in fact, the same study found nearly 60% of accountants reported making several errors every month because of their growing workload.
Especially in finance, even small mistakes can have long-term, detrimental consequences. Thankfully, finance teams can improve their effectiveness and efficiency while establishing and evolving internal controls that work in tandem with dedicated technology. Integrating the right technology should empower the office of finance to navigate changing reporting requirements, enhance collaboration, improve efficiencies, streamline processes, and reallocate valuable time and expertise to strategic decision-making and value-adding activities.
Meeting Teams Where They Are
As of June 2023, a Thomson Reuters article noted that the number of finance and accounting employees working remotely had nearly doubled to 80%. Like many disciplines, the finance field is looking for a structure to support remote work. Among finance professionals looking for a new job, 63% reported they were looking for a hybrid position, while 47% wanted a fully remote position.
The ability to enable secure communication and collaboration—across teams and regardless of physical location—creates efficiencies and streamlines day-to-day operations.
Adapting To New Reporting Regulations
New and evolving financial reporting regulations continue to emerge—particularly within the complex realm of environmental, social and governance (ESG) reporting—which require more expanded reliable datasets. Finance teams’ investments in technology should facilitate strong data management, especially for dynamic datasets like leases and their related records, to ensure the integrity of their reporting and analysis.
For example, although the SEC voluntarily paused the implementation of its new climate disclosure rule, many public and private companies are already impacted by California’s recent legislation as well as the European climate disclosure laws and ISSB standards.
A large portion of an organization’s carbon footprint can be tied to its leases, as nearly 40% of global carbon dioxide emissions come from the real estate sector. As the private and public sectors learned with the introduction of the lease accounting standards (ASC 842, IFRS 16 and GASB 87), it’s challenging to gather and manage lease data. These documents are often long, complex, full of critical options and amendments, and are housed across various locations within an organization.
Using technology to centralize data from disparate sources into a unified platform ensures cross-functional teams can draw from consistent, up-to-date information. The result is reduced risks that might prevent them from achieving and sustaining compliance or even failing an audit.
Doing More With Less
Many organizations are also combating industrywide talent shortages by leveraging automation in their day-to-day operations to mitigate manual tasks and lighten their teams’ workload.
For example, CURO, a short-term credit solution provider, previously spent critical time manually managing leases for its extensive retail portfolio. We worked with CURO to help centralize its lease data, allowing the company to quickly search for lease clauses abstracted into a complete system of record.
CURO has saved hundreds of hours every month that it can reallocate to higher-value work such as analyzing the investments across the lease portfolio. It is now positioned to take advantage of emerging technological capabilities such as AI-powered data extraction or the ability to integrate this data with other systems for more robust business insights.
Understanding Challenges To Create The Best Outcomes
It’s important to note, however, that as finance teams modernize their operations, they can still face challenges with securing initial buy-in from their direct team, leadership and possibly their IT department.
Employees accustomed to traditional workflows may resist innovation, fearing job displacement or difficulties in learning new systems. Transparent communication from leadership and comprehensive training are essential for successful change management. Establishing and enhancing internal processes and policies can be another challenge. Companies should opt for solutions that can be easily configured to accommodate their unique needs and integrate with their existing technology stack—capabilities that will be particularly important to their IT teams.
Adopting The Right Technology Today To Help The Workforce Of Tomorrow
As Gartner Inc. highlights (via the Journal of Accountancy), companies embracing user-friendly, customizable technologies can reduce financial errors by 75%, underscoring the transformative potential of digital innovation.
The digital revolution in finance represents a pivotal opportunity to redefine the finance function’s role within the organization. By harnessing cutting-edge technologies, finance teams can transcend traditional boundaries and evolve into what most entered the field for in the first place—to be strategic partners, driving informed decision-making, cutting costs, mitigating risks and propelling organizational growth.
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