Connect with us

Trends

75% organizations are optimizing their accounting close processes for digital

Three quarters of finance organizations are wasting time and resources by trying to optimize accounting close processes before they have established the ability to absorb the effects of new technologies and new ways of working, according to research by Gartner, Inc.

“Corporate controllers have a once-in-a-generation chance to transform the close with digital technologies, but they are hamstrung by a process that isn’t ready for digital,” said Mallory Barg Bulman, director, research, in the Gartner Finance practice. “Controllers are wasting time optimizing processes that will soon be made redundant by the latest technology or digital disruption. Doing this offers only a marginal improvement in digital readiness over doing nothing at all, while costing much wasted effort and investment.”

To assess digital readiness in finance, Gartner collected data from 192 senior finance leaders in December 2021. The survey found that finance leaders who focused on optimizing accounting close processes for digitalization were only marginally more likely to be digital-ready than those that took no action at all. Whereas finance organizations that focused on process resiliency first, before optimization, were three times more likely to be prepared for a digital accounting close, compared to companies that took no action.

Gartner’s research found that 75% of organizations are currently optimizing their accounting close processes for digital. Trying to optimize processes that are soon to be made obsolete by new digitally enabled ways of working introduces lengthy periods of futile process mapping and standardization.

“Controllers need to take a step back and focus on building resilient processes before they begin to optimize, so that their teams are ready to go when new technologies are introduced into the close,” said Bulman.

Three steps to building process resiliency

Gartner’s research found that controllers who focused on building process resiliency first, before starting to optimize their processes, were more than twice as likely as to be digitally ready than those that only focused on optimizing processes.

The controllers who expressed confidence that their accounting close processes were ready for digital transformation took three distinct steps on the path to building process resiliency. They include:

  • Establish a Vision for Digitizing the Close Process – Organizations need a framework for determining whether interim digitization decisions are moving the close process in the correct direction. Establishing a desired future state that is measurable, task-specific and both aspirational and achievable are key elements in establishing a vision.
  • Build a Decision-Making Infrastructure – Ongoing alignment of the close process with ongoing digitization efforts require a two-part solution: First, building a framework for deciding the degree of autonomy each team can have; and secondly, continuously managing exceptions that threaten to undermine the established vision, so that they can be incorporated into digitization plans.
  • Sense Disruptions from Upstream Digitization Decisions – Leading organizations maintain mechanisms to identify upstream (non-finance) disruptions that could derail the close. These parts of the process not owned by finance are going through their own digitization efforts and have the ability to disrupt the closing process.

CT Bureau

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2022 Communications Today

error: Content is protected !!