What 2025 will bring for finance and accounting professionals
As the COVID-19 pandemic struck the world in early 2020 and rapidly spread its tentacles far and wide, the effect was felt in most companies and across departments. Finance and accounting professionals were far from isolated — they, in fact, played a critical role in responding to the crisis and ensuring that operations continued smoothly at their organizations.
On-the-ground examples
Here are some interesting statistics:
· 47 percent of CFOs were unsure of committing to technology investments in the near future, according to The Global CFO Survey 2020 by the Everest Group
· 36 percent of companies were still using paper invoices, as per a study by WNS and Tradeshift
With the business world entering a new era in finance and accounting, and the dawn of a new phase in finance and accounting careers, such companies are likely to be left behind in the race to success.
Take the example of Zoom. From 10 million daily meeting participants, it went to 300 million almost overnight. The CFO was operative in ensuring the company could manage its response to the surge and did not over-extend itself in response to the ballooning demand.
Chief concerns of CFOs
It is no secret that artificial intelligence (AI), automation, blockchain, the cloud, machine learning (ML), and several other technologies will play a definitive role in bringing about the level of commercial resilience that finance and accounting professionals must deliver for their employers. However, there is a need to be watchful about the pace of digitalization, which brings in its wake concerns about cybersecurity, attack vulnerability, and data regulations, along with reliability of infrastructure. Digitalization is not something to avoid, as the insights from data will determine how well the company flexes, reacts, and adapts to unforeseen crises of the pandemic and other kinds.
Key trends in finance and accounting
Looking ahead to 2025 and beyond, here are the key trends that will drive transformation in the finance and accounting space:
Transformative CFOs
A top role in finance and accounting careers, the CFO is becoming ever more important. A survey of CEOs by the Association of Chartered Certified Accountants (ACCA) shows that:
· 82 percent believe the importance of the CFO role will grow significantly over the next 3–5 years
· 68 percent feel that CFOs provide highly-valued strategic insights
The CFO will need to boost more than the bottom line and to enable agility and scalability, for which (s)he will leverage the power of the newest technologies. The role will not only aim at commercial success but will also include strategic partnership in the push toward digital transformation. With other C-suite members, the CFO will determine new value metrics for his/her company.
Security of decentralized finance (DeFi)
CFOs and their teams face huge risks as data balloons. With crypto assets gaining momentum and the move toward DeFi picking pace, blockchain and other decentralized technologies will be crucial in optimizing operations and keeping collaboration secure. Leveraging the data of the company will facilitate the use of blockchain and DeFi in securing transactions, finding innovative value measures, and replacing bookkeeping and reconciliation. Accounting firms will need to take cognizance of their practices and client data, and reexamine old processes and migrate these to secure, electronic ones.
Metrics beyond growth
Looking beyond the bottom line can still be profitable. Carbon emissions, for instance, are a non-financial metric that could uncover the potential for massive savings related to sustainability. Environmental, social, and governance (ESG) issues pose risks that could impact the prospects of companies, which they need to adapt to.
Forensic finance and accounting
This will play an important part in predictively and proactively handling issues of bankruptcy, business valuation, compliance, fraud, and insolvency. Technology will allow real-time bankruptcy and credit checks, along with fraud detection ahead of its actual occurrence. Forensic analytics will help in pointing to transactions that might otherwise slip under the radar.
Organizational gatekeeping
A new, reimagined skillset will become essential for future finance and accounting careers, with technology killing off many traditional processes. Finance and accounting professionals will need stronger analysis, communication, digital, and thinking skills as they must play a part in driving future innovation.
