Read this blog to discover where are you on the journey from Excel to artificial intelligence
Who would have thought data could become so competitive? In a world where transactions, data and information needs are increasing exponentially, timely, high-quality financial data is unquestionably a competitive factor. If your business has a more efficient group reconciliation and closing, it has the edge over competitors. Financial statements are more than a legal obligation: they are an essential tool for the type of decision making which enables businesses to be more successful.
So it should come as a surprise that data preparation and closing is still done in Excel in 57 percent of companies – regardless of their size. That’s according to the BARC research study Accounting Reconciliation and Closing. The Journey from Excel to Artificial Intelligence. Perhaps the 57 percent is explained by a feeling of safety in numbers. If time-consuming and error-prone workarounds with Excel are considered acceptable because they are the norm, then why change?
It seems that despite hesitance to automate, the pain is real. BARC states that 48 percent of businesses in their DACH-based study regard monitoring and managing the completeness and accuracy of financials to be the most critical factor in terms of processing time and effort. 67 percent cite faster closing as a challenge in the next three years.
Automation reduces time pressure and workload, while increasing timeliness and quality. Yet only 24 percent think that machine learning and logic algorithms could significantly improve closing and reconciliation. There seems to be a lack of recognition of the opportunity.
BARC concludes that while companies still focus on standardizing processes to handle reconciliation and closing, it should be recognised that digitalization of group accounting is about more than standardizing and automating repetitive, rule-based tasks. It is also, crucially, about pattern and trend recognition.
Traditional ERP systems are limited in several respects, not least in providing appropriate levels of completeness and accuracy. On the other hand, modern, automated IT solutions can harmonize multiple data sources to bridge local and group perspectives. Accurate data, in a short timeline.
Retention of legacy systems and legacy practices is a choice with consequences. There is an opportunity cost attached to the hours spent on manual processes, especially around closing deadlines. This is time which could be spent on value-adding tasks such as optimizing data quality and planning/forecasting. In the end, legislation might drive automation. In the meantime, companies which seize the automation opportunity can get ahead.
Do you want to discover more? Download the BARC research study Accounting Reconciliation and Closing. The Journey from Excel to Artificial Intelligence.