Adam Zoucha, MD EMEA, FloQast
After years of seeming permacrisis following the pandemic, Brexit and balance-busting inflation, 2024 will be defined not by firefighting but by innovation. Accountants will need to be bold: financial transformation is going to be essential to keep finance teams on point amid talent shortages and the possible political upheaval of a multi-election year.
Organisations need to be bold, embracing transformation on the financial, digital, and structural levels. In particular, this transformation should include not just the integration of ever-more advanced AI into our workflows, but crossing the rubicon of ‘normalised’ AI. In other words, 2024 will bring us to the point where companies that don’t implement AI are seen as falling behind their competitors – like cloud laggards before them.
As a result of all this, CFOs will need to be at the forefront of digital transformation in their organisations. If they take this opportunity to transform their operations, they’ll be able to rid accountants of outdated processes and systems that slow their work down. At the same time, they’ll be empowered to overhaul compliance processes; as mandatory ESG reporting becomes more commonplace, advanced technologies will be essential to excellent work.
Here’s how 2024’s going to look in four key areas: financial transformation, ESG and compliance, AI implementation, and IPOs.
Financial transformation will bring stability and growth
Finance teams will likely continue to undergo major digitisation over the coming 12 months – because a dynamic approach to financial transformation is the best way to put organisations ahead of the competition. In particular, implementing tools that advise on financial preparation, compliance roadblocks, and strategic planning will ensure businesses are ready for the next phase of their growth journey.
This isn’t just a pipe dream – most organisations are under massive pressure to achieve financial transformation through improved technology, and this trend will certainly continue through 2024. Whatever the size of your business, cloud-based software is becoming an integral part of accounting operations, as companies embrace a cloud-first strategy for scalability, flexibility, and innovation. Simultaneously, as organisations integrate cloud-based tools and services into their core infrastructure, they will also increasingly need to implement cloud-based security measures to bolster their financial transformation efforts.
ESG and compliance will put organisations on the path to sustainable success
2024 is set to be a defining year for ESG strategies. In the wake of legislation like the Corporate Sustainability Reporting Directive (CSRD), reporting on environmental and social impact is going to become mandatory for many organisations for the first time, so it’s likely many companies will be looking for ways to define and measure their progress. Those who can tell their ESG story via sound data collection with excellent standardisation and accuracy will ensure audit-ready, error-free reporting.
According to our research, CFOs are currently at greater risk of noncompliance due to a lack of strategy in the current compliance function. This is compounded by insufficient staffing, skills gaps in teams and the absence of digital transformation within existing processes. As a result, they must prioritise compliance in 2024, especially since more companies will be looking to IPO amid a cautiously optimistic economic outlook (more on that later). Shoddy compliance reporting will do nothing for companies’ share value.
AI: a powerful ally for employees and employers alike
In 2024, AI and automation will continue to be increasingly used to streamline routine tasks, saving time for accountants. AI is already transforming the way we work, and while there are justifiable concerns about the use of this very young technology, used wisely it can be a powerful ally to support understaffed teams, enhance strategic thinking, and boost employee potential. The accountancy sector is experiencing a labour shortage, and this is where AI and automation can step in – doing the grunt work of processing data, providing valuable insights to aid strategic decision-making, and streamlining everyday tasks owned by human staff.
This isn’t just a cheaper model in the long run: it’s also good for job satisfaction. Improved efficiency frees up accountants’ time so they can focus on complex financial analysis and become more consultative. We can anticipate that 2024 will increasingly see accountants embracing AI tools, meaning they can be more strategic and focus on long-term organisational success.
Getting ready for IPO in a hopeful market
Finally, with the inflationary needle moving in the right direction, the IPO market may continue a recovery into 2024. Organisations looking to IPO will need to supercharge their processes: they’ll need to be robust to stand up to investor scrutiny. Not only does compliance help companies avoid corporate and individual liability, but it enhances investor confidence by demonstrating a commitment to transparency and accountability.
The unifying theme across the board is that the right technology must be deployed in the right place to boost performance and enable businesses to make the most of 2024. The tools are there: now it’s up to leaders to grasp the opportunities they provide.