Welcome to the accounting and finance roundup covering the best content published during June 2018. In this edition, we will look at the difficulties of adapting to accounting changes, Europe’s role in digital transformation, financial reporting for the digital era, and much more.
A caveat: These are the opinions of the writers themselves. We don’t always agree with every argument presented in these articles, but we do think you’ll find the stories interesting!
Companies Reflect Pain Points Over Accounting Change
By Tammy Whitehouse for Compliance Week
Tammy Whitehouse writes this article for Compliance Week, wherein she details about a poll recently published by PwC. Over half of the poll’s respondents admit to having difficulties adopting the new accounting standards within the past few years. Of all companies polled, only 5% said they did not find the transition difficult.
The accounting change took effect this year with some companies claiming that they had to spend up to $1 million to cope with the accounting changes. The rest of the article details some other findings that were discovered from the poll, such as project management and system issues (if there were any).
Europe Risks Falling Behind in Digital Transformation
When it comes to digital transformation, it seems that Europe is lagging behind from the rest of the world. According to this article by Patrick McGee, written for the Financial Times, only about 5% of manufacturers in Europe are ‘digital champions’. It pales in comparison to the digital transformation in Asia-Pacific (19%) and the Americas (11%).
The good news is that Europe has built strong foundations in fields such as artificial intelligence, together with regional and national initiatives for digitalising industry. With all of the tools in place, McGee adds that Europe has to move faster in order to cope with the rest of the world.
Why We Need to Update Financial Reporting for the Digital Era
In this collaborative article for Harvard Business Review, the writers take a closer look at the need for updating financial reporting to suit the digitalisation of modern companies. They believe that financial statements fail to showcase the source of value creation for these businesses. They also recommend that it might be a good time to re-think financial reporting methods.
If you want to learn more about what these initiatives and new models that were suggested, you can find out more in this Harvard Business Review article.
How Finance Can Use Digital Transformation to Inform Business Strategy
By John R. Beaty II for Accounting Today
John Beaty II tackles the impact that digital transformation has on overall strategic decisions of a firm, in this article for Accounting Today. He points out the fact that prior to digital transformation, accounting and finance professionals would be tasked to handle the critical financial tasks. But with cloud and automation, finance professionals can ease up their schedule to focus on the more important roles such as strategic decision-making processes.
Digital technologies and cloud accounting has also enabled these professionals to obtain data that will enable them to make those critical business decisions, says Beaty II.
6 Steps to Accounting Automation Success
In this Journal of Accountancy article, Lou Carlozo discusses 6 recommendations on how to exploit automation and machine learning in the accounting industry for growth and success. These recommendations were shared by a Boomer Consulting principal and consultant during an AICPA ENGAGE 2018 conference presentation.
According to the conference speakers, if firms are able to follow and adopt these 6 key steps, automation transformation is highly likely to take place within the firm.
The Accounting Skills Most in Demand
James Gallaway sums up the skills that are considered as most valuable in the world of accounting, according to recruitment specialists, in this article for In The Black magazine. Automation has a huge role to play here; it will be able to perform some of the jobs that accounting professionals do right now. Accounting professionals with the ability to understand data and how it works will gain an edge.
Aside from these, those with ability to map out directions in a team are more likely to succeed. Overall, Gallaway hints that flexibility is a crucial skill to possess for accountants and finance professionals as their roles will clearly change with automation and digital transformation.
Have we missed any great articles? Please do let us know, and if you’d like to submit your article for consideration, get in touch with firstname.lastname@example.org.