By: Terry Smagh, Senior Vice President, Asia Pacific & Japan, accounting automation software provider BlackLine
When we surveyed C-suite executive and finance professionals in select global cities, including Singapore and Hong Kong, we learned that an astonishing 69 per cent of respondents believed that they, their CEO or CFO may have made a significant business decision based on out-of-date or incorrect financial data. In today’s competitive markets, with increasing regulatory scrutiny, the ramifications of this lack of visibility can be felt throughout the organisation. Companies simply cannot afford to report or make decisions based on inaccurate financial information.
According to the ICAEW, gross domestic product (GDP) in Southeast Asia is expected to slow from 5.3 per cent in 2018 to 4.8 per cent this year, and the export-dependent Singaporean economy could be most negatively affected by current trade tensions. The pressure is on for C-suite executives and corporate boards in the region to set strategies based on near real-time data.
Companies were able to get by before with the traditional record-to-report process that prevented finance departments from providing meaningful data to other departments until after the books were closed each month. Now, this limited view has the potential to hold companies back from gaining a competitive advantage in complex, volatile markets. Technology solutions are helping company leaders not only identify and act on the most relevant data but also govern how the financial data is collected and shared throughout the organization.
New regulations are also raising the stakes for organisations. Last year, for example, the Monetary Authority of Singapore (MAS) revised the Code of Corporate Governance. The new code, which went into effect this year, requires all listed companies to create and maintain an effective, ongoing internal audit function to constantly monitor the adequacy and effectiveness of its internal controls and risk management systems as well as help the board discharge its duties. This requirement helps to strengthen corporate governance by putting a greater focus on internal management, processes and, ultimately, the financial information shared with leadership. These teams within organisations need the right technology to help them meet these requirements.
How can automation help?
Financial professionals are fortunate today to have the benefit of technology solutions that automate
tedious processes and help to maintain integrity in numbers and internal processes. All accounting information can be kept in a centralised database that is updated in near real-time for use by various accounting functions. The integrated, real-time reports generated by these solutions are available to all users in a consistent manner and help to foster trust in accounting processes. Finance professionals can take advantage of these solutions’ capabilities by communicating the risk management and process integrity information that executive leaders and other departments rely on to address risk concerns related to environmental, social, and governance (ESG) issues.
Organisations that are successfully implementing these solutions are incorporating it into a modern approach, called Continuous Accounting, which increases the quality, accuracy, and efficiency of the financial close and other period-end activity. It requires organisations to improve and standardise processes and automate manual, repetitive tasks to unlock the financial information executives need for better decision-making. This approach also creates time for reporting to be done at the point of need, instead of after month-end close. With real-time visibility into specific details, finance teams can instantly research and correct issues instead of waiting until the end of the month. Modern business requires every part of the organisation to be forward-looking and strategic to drive value. By automating finance processes and embedding controls into day-to-day activities, the accounting function is transformed to create a more efficient close, more accurate financials, and a more effective organisation.