It’s true. The machines are coming for jobs in finance. But not all of them—and in many ways, automation is already making the jobs of financial leaders much easier.
The digital transformation of corporate finance is well underway, but where do we go from here? And what, exactly, can and can’t be automated – right now, with today’s tech?
Let’s start with six tasks you see now that may well be “uphill-both-ways” stories by the time today’s college kids join your corporate finance team in a few years.
1. AP clerks spending hours loading invoices into the AP system, then manually chasing approvals and three-way match verifications
Agile, cloud-based solutions like Kofax automate invoice processing, from invoice receipt through data extraction and into the approval process.
Kofax offers AI-enabled two- and three-way match, removing a lot of the grunt work while minimizing the risk of human error.
2. First-year auditors hunched over rules-based working papers (workpapers)
Vendors like UiPath and BluePrism bring out-of-the-box AI-based software to audit. Auditors click a pre-programmed audit test, and a few moments later the results arrive—ready for sign-off, review, and approval.
3. Point-in-time, periodic fraud reviews
Risk management solutions from providers like IDEA and ACL help auditors, internal control professionals, risk managers, and people in the field continually perform risk analysis in real time—without having to manually review risk assessments in spreadsheets.
4. Cash application specialists stressing about match rates and unapplied cash numbers
5. Typing “2/10 net 30” on invoices and hoping for cash flow miracles to happen
Net discount and trade credit have been around much longer than any of us, but they may be on their way out thanks to automation.
Companies like C2FO are pioneering dynamic discounting, eliminating net discount cash flow strategies and replacing them with solutions that allow companies to request early payments on demand directly from their business partners.
6. Blind reliance on clunky, inefficient ERP systems
Accenture predicts that the ‘Finance 2020’ organization will move away from its traditional focus on ERP systems. Instead, companies will increasingly embrace agile, specialized, cloud-based solutions like those listed above.
It’s not all bad. There will still be jobs.
Relax—if it looks bad for humans in finance, it’s not.
Many professionals can’t be replaced by robots just yet and there are many things that likely shouldn’t be automated at all.
What can be automated in finance?
A 2018 study by McKinsey determined that 61% of finance activities can be partially automated and 42% can be fully automated.
The best areas for automation in finance are where the transactions are. That’s in general accounting, cash disbursement, and revenue management, according to 75% of the CFOs McKinsey asked.
Across these functions, full automation will arrive for many finance activities, including:
- Booking complex journal entries
- Completing account reconciliations
- Performing two- and three-way invoice matching
- Cash application
- Creating aging reports
And, what can’t be automated in finance?
When it comes to automation, the greater the human reasoning, empathy, and interaction needed, the less likely it is to be automated.
Every CFO in the McKinsey study agreed that business development was difficult to automate and that external relations was at least somewhat difficult to automate.
Add to this leadership, strategic development, and people management. All of these need human input that machines just can’t deliver (yet).
What automation ultimately means for finance
Today’s finance groups are built to process, review, and approve huge numbers of transactions.
The hard truth is that automation is increasingly replacing this manual transaction processing, and a disproportionate impact will be felt in the lowest levels of finance groups.
Changes to roles, livelihoods, and reporting structures are all coming. But ultimately automation will cut costs, enable more efficient growth, and allow employees to focus on more meaningful work.
How finance executives can stay relevant
Traditional finance roles are rapidly changing, and so are the professional skills required to succeed in them.
Accenture reports that 78% of CFOs believe that these changes will be quick and hard-hitting. They see that finance roles are becoming less tactical and more strategic—it’s no longer enough to be a hard worker and good with numbers.
With automation, organizations need finance professionals with skills that complement digital transformation instead of competing against it.
More automation means less number crunching and more strategic decision making—and if you love finance, that’s great news.
More than three of every four junior finance professionals believe “there has never been a more exciting time” to be in finance.