The economic, social, and political impacts of the COVID-19 widespread have speed up businesses, work, and life changes. However, there are signs of optimism that accounting and finance leaders and their teams can better navigate the current climate and are prepared for future scenarios, like more lockdowns or additional restrictions.
Financial leaders have pivoted to technology to solve Covid-related challenges. Companies with a heavy focus on resilient supply chains for profitability are taking into account a digital supply chain management system that enhances insights into the supply chain.
This year, the technology being implemented to solve Covid’s immediate challenges will be embraced by organizations and their customers.
Here are the top five 2021 trends in finance and accounting.
- Environment, Social, and Governance (ESG) reporting will become more critical.
ESG will gain a new focus in 2021. Fulfill consumer mandates for more corporate responsibility, and serve as crucial organizational risk mitigation.
Currently, finance teams and lead management can better connect improved organizational performance with sustainability measures. For instance, organizations can realize decreased costs when they minimize their physical office footprints, but this also reduces environmental impacts. ESG will no longer be perceived as a cost but rather a benefit for organizations.
- Automation is the new Norm
When the remote financial close became a reality for most finance departments during the pandemic, those who had some automated processes fared better than those who did not. Finance leaders are making more significant investments in cloud computing and software due to whether the remote financial close is here to stay or becomes a hybrid approach.
- Finance Teams, prefer work from home
There is a two-part process in facilitating a successful remote working arrangement.
- CFOs must provide the right technology tools to their staff.
- CFOs must champion teamwork and collaboration among individual teams and cross-functionally, throughout the organization. Lack of in-person contact can make employee engagement and productivity suffer. CFOs need to build and maintain a corporate culture with the help of both HR and IT.
- Enterprise Risk Management (ERM) becomes finance accountability.
During this pandemic, the finance team has unique insight into a company’s financials and supply chains, great sources of risk for global organizations. They also have a framework for addressing ERM. The COSO framework enables finance teams to forestall crisis management by focusing on managing risks and preventing issues before they occur, emphasizing Governance and Culture, Strategy and Objective Setting, Performance, Review and Revision, and Information, Communications, and Reporting. This year, companies will be high-focused on mitigating risks – be the environmental, reputational, or other – and the role of finance in prevention will become more crucial. Using the COSO ERM framework properly, management accountants can better anticipate and prepare for disruptions and natural disasters with plans and procedures for business continuity and remote work.
- Upskilling is the call-to-action.
There is a great importance of continuous learning and offering courses in data analytics, blockchain, and other technologies, as a way of helping professionals gain the skills they need to compete in the new post-Covid world of work.
Financial leaders will have the most robust business case yet for investment in technologies like intelligent automation, RPA, data analytics, and blockchain this year. There will be more opportunities to prove that they can add value to an organization beyond reporting and disclosure. Today’s finance function, which is pivoting from value stewardship to value creation, requires finance professionals to continually upskill and acquire competencies related to communication, decision making, and leadership. 2021 is the finance professional’s time to shine in this regard.