In today’s rapidly evolving business landscape, Chief Financial Officers (CFOs) face a myriad of challenges. A recent McKinsey report, “Toward the long term: CFO perspectives on the future of finance,” sheds light on the growing focus on long-term planning and the high expectations for technology, particularly generative AI, in finance departments.
However, the report also reveals that many finance functions are still in the early stages of their digital transformation journeys. This is where accounting engines can play a crucial role in helping CFOs overcome automation challenges and drive their organizations forward.
The current state of finance automation
According to the McKinsey survey, while nearly all finance functions have invested in digitization and automation, a significant number are still in the early stages:
- 41% of CFOs report that only up to 25% of their finance processes are currently digitized or automated.
- 79% of finance functions have digitized or automated up to 25% of their processes in the past 12 months.
These numbers indicate a substantial opportunity for improvement in finance automation.
Challenges faced by CFOs
The report highlights several key challenges that CFOs face when trying to create value from data and technology:
- Already-demanding workload of finance teams (70%)
- Lack of relevant capabilities within finance teams (67%)
- Insufficient resources to invest in digital finance tools (62%)
- Lack of adequate IT infrastructure (56%)
Interestingly, organizational issues seem to pose bigger barriers than technical ones when it comes to capturing tech-related value in finance.
The promise of accounting engines
Accounting engines such as AFAH (Axway Financial Accounting Hub) offer a solution to many of these challenges by providing a comprehensive platform for financial data management, transformation, and analysis. Here’s how an accounting engine can help CFOs overcome automation challenges:
1. Scalability and flexibility with AFAH
The Axway Financial Accounting Hub (AFAH) offers an agnostic multi-everything engine and scalable Accounting Rule engine. These features allow organizations to adapt to changing business needs and handle complex transformations across different systems and standards.
AFAH’s architecture ensures that as your business grows or evolves, your financial processes can seamlessly scale and flex to meet new requirements.
2. Empowering finance teams
By providing finance-dedicated mapping functions and collaborative modeling tools, accounting engines empower finance teams to take ownership of their processes and handle complex transformations and data standardization tasks without heavy reliance on IT resources.
3. Increased operational efficiency
Accounting engines automate many manual processes, such as data transformation, reconciliation, and posting. This automation helps alleviate the demanding workloads faced by finance teams and allows them to focus on more strategic tasks.
4. Improved compliance and risk management
Accounting engines come with built-in data quality features such as automated functional controls, reference data synchronization, and automated recycling.
These capabilities, combined with self-service analytics and native actionable audit trails, can help CFOs improve the accuracy and reliability of their financial data, and ensure compliance with various accounting standards and reduce financial risks.
5. Improving data quality and insights
By enabling the immediate exploitation of detailed, native audit trails and self-service analysis capabilities, an accounting engine such as AFAH, gives CFOs the means to improve the accuracy and reliability of their financial data, and gain the confidence of their peers in charge of the company’s business lines.
Accounting engines incorporate advanced functions to guarantee data quality. These include automated controls, reference data synchronization and automatic recycling. They also offer immediate access to detailed audit trails and facilitate self-service analysis. In this way, an engine like AFAH helps CFOs enhance the accuracy and reliability of their information. They can then meet both regulatory and business reporting requirements with data they can justify.
In addition, the quality of the data obtained is crucial to the effective use of artificial intelligence.
6. Future-proofing finance functions
As the McKinsey report indicates, CFOs have high expectations for AI and generative AI in finance. They must first overcome data quality hurdles.
Accounting engines, with their advanced data transformation, control, enrichment and exposure capabilities, can serve as the foundation for future AI implementations, helping finance functions stay ahead of the curve
AFAH: one platform, multiple use cases
AFAH can address various use cases that CFOs face:
- Streamlining data migration to new ERP systems
- Facilitating data exchange between multiple financial systems
- Handling multiple accounting standards and charts of accounts
- Improving ERP-Payroll integration
- Accelerating interface rebuilds
- Ensuring up-to-date documentation
- Automating accounting postings and reconciliation processes
- Storing and managing detailed data for analysis and reporting
- Ensuring accurate revenue recognition in complex scenarios
- Normalizing data across subsidiaries for faster consolidation
- Streamlining intercompany reconciliation
- Managing exceptions in financial data
- Providing detailed and actionable audit trails
AFAH is the clear choice for modern financial accounting
As CFOs look to overcome automation challenges and drive their finance functions forward, there is an obvious choice emerging in the field of accounting engines: the Axway Financial Accounting Hub (AFAH). This collaborative platform, dedicated to finance teams, is already orchestrating billions of accounting transactions every day for resource-intensive customers such as large retailers and banks.
AFAH exemplifies the potential of modern accounting engines to transform finance operations. Its agnostic multi-everything and scalable Accounting Rule engine allow organizations to adapt to changing business needs and handle complex transformations across different systems and standards.
The platform’s ability to handle massive volumes of transactions, coupled with its flexibility to adapt to various accounting standards and business models, makes it an ideal solution for large, complex organizations. AFAH’s built-in data quality features, advanced analytics capabilities, and seamless integration with existing systems address many of the key challenges faced by CFOs in today’s dynamic business environment.
Moreover, as the finance function continues to evolve and embrace technologies like AI and generative AI, AFAH’s robust data transformation and exposure capabilities position it as a strong foundation for these future implementations. This forward-looking aspect of AFAH aligns well with the long-term planning focus that many CFOs are adopting, as highlighted in the McKinsey report.
As technology continues to reshape the finance function, CFOs who embrace advanced accounting engines like AFAH will be better positioned to navigate the complexities of modern business, drive strategic decision-making, and create long-term value for their organizations.
By choosing AFAH, CFOs are not just solving today’s automation challenges – they’re preparing their finance functions for the future of finance.
Learn how AFAH can future-enable your financial IT architecture for long-term business growth.
Follow us on social