2017 Trends for CFO's Trend #3 - Continuous Accounting
Posted by George Rotsch on April 7, 2017
Continuous Accounting is a buzzword that describes a paradigm shift for accounting professionals responsible for closing the books and producing financial statements. The traditional way is to wait until period end, work long hours, and get the end of the period reporting done. The concept of continuous accounting is to not wait until the end of the period to execute the many routine tasks that need to be done to close the books.
New technology, introduced over the past years, allows accounting teams to execute tasks required for the close throughout the period. “Continuous accounting provides better visibility into financial results throughout the period. Reports are live and in real time”, according to Elizabeth Milne a veteran financial professional and manager of the accounting portfolio at SAP.
According to Ventura Research in 2016, advocates of continuous accounting embrace three principles…
- automating mechanical, repetitive accounting processes
- distributing the workload continuously over the accounting period
- establishing a culture of continuous improvement
Continuous Accounting relies on process automation to deliver multiple benefits to the organization including efficiency, enhanced financial controls, greater accuracy and consistency. Automation can eliminate the need to reenter data, minimize the need for spreadsheets, uses workflows that are supported by today’s accounting software.
Like so many buzzwords linked to popular trends… we don’t know if the phrase of Continuous Accounting becomes the standard or just hangs out there as an idea to shoot for and an aging buzzword that comes to stand for too many things. However, we do believe that concept is attractive. Based on our experience automating key functions, building integrations that eliminate work, leveraging the features of the new accounting platforms, and looking for opportunities to streamline the accounting process are just good for the accounting function.
We are inspired by the ideals of continuous accounting and believe this year, it will gain momentum and take hold as shift in thinking for accounting departments across the country.