December brought a variety of trends focusing on a review of the year as well as looking ahead to 2019. Some of these include overcoming data analytics challenges to gain better insights as well as a surprising number of CFOs with an incomplete plan for the future.
Here are the top three trends we saw in December:
Accounting Continues Adapting to Cloud Revolution
To stay competitive, businesses and accountants must be aware of how the accounting world is rapidly changing and adapt to the AI revolution, most notably cloud accounting. Cloud accounting is drastically shifting the landscape of accounting away from the traditional desktop and into the more efficient cloud. Rather than having to install the software across every employee computer, cloud accounting saves companies money and storage space by allowing them to access the software through the internet. Research conducted by Xero showed that companies that use 100% cloud-based accounting saw a 15% year-over-year revenue growth. It’s no wonder that the global cloud account market size is projected to grow from its current $2.62 billion to $4.25 billion by the end of 2023.
Challenges to Adopting Advanced Data Analytics in Finance
By now, it’s common knowledge that CFOs see impressive results when leveraging the power of data analytics in finance, which includes techniques such as visualization, machine learning and predictive analysis. However, a Workday survey of 670 respondents found that only 35 percent claim to be making more use of advanced analytics to glean deeper insights. If the benefits of financial data are so great, why is this number so low?
One culprit is simply having access to data. Using advanced analytics requires combining financial with non-financial data. Many companies are often stuck in organizational silos, making data integration difficult. Addressing this issue means understanding where combining financial and non-financial data can add value. With a clearer picture, finance leaders can consider the IT systems, analytics tools, and analytics capability that will be required. Another challenge is making non-financial data more accessible for analysis. The solution involves finance leaders working closely with IT to transform systems and unlocking valuable data.
CFOs Lack Succession Plans
A survey conducted by Robert Half Management Resources found that 48 percent of 1,100 CFOs haven’t chosen a successor. Among this group, about two-thirds said they had no plans to leave soon, while other reasons included not having qualified candidates at the company as well as needing to focus on other priorities. According to the Wall Street Journal, the absence of a succession plan increases organizations’ potential for various risks. A CFO leaving unexpectedly can disrupt productivity, delay important strategic decisions, hinder internal professional development and more.
“A strong internal candidate and a regularly updated list of the top individuals who could be the new CFO can expedite the search and limit disruption to the business.”
– Jenna Fisher, Head of Global Corporate Sector at Russell Reynolds Associates
Evolving Business in a Changing World
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