Connect with us

Finance

HOW AUTOMATION WILL IMPACT THE FUTURE OF FINANCE

Published

on

Robert Douglas, Europe planning director at Adaptive Insights, a Workday company

 

To understand how critical automation is becoming to modern finance, take a look at the shift in what skills are highly valued for new hires. In a survey of CFOs*, three years ago 78% of CFOs said the most important skill was proficiency with Excel. Last year, only 5% of CFOs listed Excel as the top skill. So, what are CFOs looking for as they build their teams? The ability to adapt to new technologies.

Automation is becoming the norm in business, especially in areas like marketing, HR, and, most recently, in finance. As such, flexibility and adaptability are now necessary, if not imperative, assets—with speed and efficiency being the desired results. Additionally, an upgrade in technology and developing of professional skills are now at the forefront of companies’ new initiatives. For this reason, the ability to master new technologies is exactly what a modern company expects from its new recruits, and the finance team is no exception.

Today, automation in finance is mainly utilised to carry out manual tasks that are traditionally considered to be low-value, such as data entry, verification, and reconciliation. These tasks are generally spreadsheet-based and tend to be tedious and repetitive, as well as time-consuming. This is powerful, considering that as much as 34% of a financial manager’s time could be automated by adopting technology, according to a study** by McKinsey Global Institute. But two key drivers are pushing CFOs to automate even more: the increasing complexity and volume of the data to be evaluated, and the urgency with which results are needed.

 

Robert Douglas

The power of automation

In today’s “age of urgency,” the ability to make informed decisions quickly is a competitive advantage. For CFOs, automation represents an opportunity to impact the day to day work of finance, but more important, an opportunity to enable corporate agility by playing a greater role in strategy and decision support. Cracking the stereotypes of finance as back-office number crunchers, automation allows finance teams to leave time-consuming, manual tasks behind so they can focus on higher value work and become strategic partners to the business. Additionally, faster and higher-quality insights lead to more accurate reporting and planning, which increase overall productivity across the organization.

At P.F. Chang’s, which operates more than 300 Asian-themed restaurants in 25 countries, automation has been the critical first step in transforming how the company develops plans, budgets, and forecasts. By relieving the FP&A team of productivity-killing busywork gives finance time to do a better job transferring “business acumen to financial performance” –the definition of what agility really means to a business.

With the freedom to concentrate on strategic work like identifying why some restaurants were experiencing shortfalls in wine sales growth margins, the finance group at P.F. Chang’s helped those locations implement new best sales practices that led to a 300% increase in wine margins in just a month. And in 2018, when restaurants in 18 states in the US scrambled to preserve margins after minimum wage increases, P.F. Chang’s was able to analyze productivity so effectively that it optimized its cost of labor by 30 basis points, even as its publicly held competitors were walloped by an average labor cost hit of 50 basis points.

 

A new kind of strategy

A big part of the controversy surrounding automation in businesses is the concern that employees may potentially lose their jobs to machines. However, it is important to note that although automation will relieve finance employees of menial tasks, it represents a shift in skill sets, giving them the opportunity for more strategic roles rather than data entry or report building. In fact, a recent study*** by Robert Half found that automation will create more finance jobs than it replaces. This means job numbers will not be reduced, but rather new opportunities will arise.

Today, automation isn’t a nice to have, but a must have. The volume of data that businesses have to analyse daily is doubling every year, making automation critical for every business in every industry. And advances in automation continue to march on. Looking ahead, artificial intelligence (AI) and machine learning automate the time-consuming creation of ‘what-if scenario’ scenario modeling at scale. Most CFOs believe**** that the utilisation of AI software will more easily surface insights and suggest plans of attack. The automation of routine tasks such as data collection and the ability for machines to pose hypothetical scenarios in the future will enable finance to offer a fresh perspective, focus on strategy, and deliver more value to their organizations.

In the end, the days of being hired for your impressive Excel skills are over. Rather, CFOs are seeking individuals who are capable of understanding, adapting, and accepting change. The business landscape is being revolutionised by automation, allowing finance teams’ creativity and strategy plans to flourish. The end result is a new-found agility that will drive businesses to success in this age of urgency.

 

* https://www.adaptiveinsights.com/cfo-indicator/automation
** https://www.forbes.com/sites/workday/2017/11/03/how-ai-and-automation-will-shape-finance-in-the-future/#771cd18f481b
*** https://www.zdnet.com/article/automation-will-create-more-finance-jobs-than-it-replaces-robert-half/
**** https://www.adaptiveinsights.com/cfo-indicator/automation

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Finance

HOW TO TELL IF YOU’RE OVERPAYING TAXES

Published

on

By

HOW TO TELL IF YOU’RE OVERPAYING TAXES

Paying taxes is a necessary act in our world, and with good reason. Our governments use taxes to build the infrastructure we use, improve our children’s education, and fund the societal safety nets we all end up needing at least once in our lives, like Social Security, unemployment insurance, and welfare.

There’s a difference between paying your fair share and paying too much because that money could be used to better your situation instead of sitting in a government account. But how do you know whether you’re paying too much and what can you do about it? We’ve got a few tips below.

 

The easiest way to tell if you’re overpaying: Do you get a refund every year?

Does your yearly tax filing fill you with a sense of excitement because of the refund you’ll receive? Unfortunately, that excitement is a clear sign you’re paying too much in taxes.

Try to see your taxes like a loan you give to the IRS. If you pay too much, then you’ve given them above and beyond your fair share, interest-free. Yes, you get it back by April (if you file on time and there’s not an extension for a global pandemic) of the following year, but you’ve lost the opportunity to make that money work for you by either accruing interest, getting rid of debt, or improving your lifestyle. This is known as “opportunity cost” and removing as much of it as possible is a critical part of having a solid financial plan.

Balancing how much you pay in taxes works both ways. Underpaying taxes amounts to an interest-free loan from the IRS to you that will need to be paid in full by Tax Day on April 15. If you can land into a sweet spot where you owe $0 and are refunded a trivial amount, then you’ve adjusted your withholdings correctly. It’s a tricky situation to get just right, though, so let’s cover a few adjustments you can make.

 

How to adjust the amount of taxes withheld from your paycheck

Taxes in the U.S. are complicated, so don’t feel bad if you’re just now realizing you’ve been overpaying.

If you have an employer, the first step is to figure out which department handles your payroll and taxes. Typically this will be HR, though it can fall on the accounting department, too. You can update your withholdings at any time, though it’s better to adjust it when new life circumstances come up. These include:

  • Getting married or divorced
  • Having a child, either from birth or adoption
  • Changes in income

To adjust withholdings, you’ll submit a new W-4 that includes your updated tax situation. You shouldn’t need to send any additional verification, but check with the payroll department to see what the latest requirements from the IRS look like.

 

What to do after you’ve adjusted your withholdings

If you’re able to adjust your withholdings, you should see a bigger paycheck after your next pay period. While it can be exciting to have more money coming in, it’s important you use this opportunity to get into a better financial situation. Consider putting that “extra” money toward paying down your debt or putting it into a retirement account. Using that new infusion of cash responsibly will not only help your financial situation now but ensure you have a stable source of income in retirement, too.

Continue Reading

Finance

WHY THE EXPLOSION IN LOCAL RETAIL DEMANDS NEW PAYMENT METHODS

Published

on

By

Kasper Enggaard Krog, CEO at mobile payment and business technology firm, Vibrant, explains why micro businesses are being badly let down by contactless payment providers while local retail has boomed.

 

Before the pandemic, between 40[i] and 47[ii] per cent of micro businesses didn’t accept card payments, depending which statistics you prefer. This includes everything from corner shops to cafes and builders to barbers. They relied on cash, cheque, or where suitable, perhaps the laborious process of an invoice and bank transfer.

This is despite there being 6 billion contactless cards in the world and 47 per cent of people preferring to pay with one when at a physical point of sale[iii]. At first glance, it might seem that these small traders were cutting their noses off to spite their faces. Customers wanted to pay them with cards, why wouldn’t they just allow them to do so?

 

What was stopping merchants?

The answer is simple. Because for the smallest of merchants, accepting a card payment has always led to expensive ongoing fees, results in slow settlements, requires admin and calls for an up-front investment in cumbersome and basic technology.

It won’t be news to anyone in the industry that the recurring costs all add up. Transaction fees are typically between 1 per cent and 3 per cent, not to mention authorisation fees and merchant service charges[iv]. A credit card reader might be about £20 and the same for a receipt printer. This all eats into profit, not to mention time.

 

Kasper Enggaard Krog

The pandemic changed it all

Yet the pandemic has forced micro businesses to reassess their reticence to take card payments. Two reasons are behind this. Firstly, there has been an explosion in people shopping where they live. When lockdowns swept across Europe, it became hard to get to larger retailers. Local merchants of all sorts became a lifeline[v].

Not only that, but many people were forced to reconnect to their communities and realised they enjoyed shopping on their street and wanted to support independent businesses. The data proves this. According to research, the convenience store sector grew by 6 per cent in 2020[vi].

This led to the second factor, contactless payments were considered safer than handling cards or cash. The overall impact of more shoppers and the threat of infection led to a boom in contactless payments. In fact, the number of purchases made in May 2021 via contactless technology doubled compared with the same month a year earlier and was up 50 per cent on May 2019[vii].

 

Woefully underserved

This shift to accepting card payments among the smallest of businesses should be applauded. There are currently £2.25 trillion in cash and cheque payments made in Europe[viii]. They’re now opening themselves up to this huge market.

This is undoubtedly good for consumers and merchants alike. But it does beg the question, why did it take a pandemic to cause the change? Why did they have to face the prospect of potential infection or financial ruin to make the move?

Simple, the existing model is broken. The barriers to accepting card payments remain – high cost, poor tech and slow settlements – but they’ve been overcome through necessity rather than benefit. These businesses remain woefully underserved yet have been forced to accept what is on offer. There must be another way.

And there is. For the first time, the technology now exists for market traders, stall holders, car washes – any number of micro businesses – to take contactless payments using only their phone. No additional tech. No annoying dongles or readers that take up space and will ultimately add to the vast rubbish bin of obsolete, single-function peripheries. These will soon join calculators, MP3 players and digital cameras.

Furthermore, this tech not only takes payments, but within months is expected to allow merchants to run their whole business on their phone. They will be able to add product lists, inventory details, accounting tools and much more. It’s like a mini enterprise resource management system for the tiniest of firms. And the fees are transparent, predictable, lower than the market rate and don’t have binding contracts. Importantly, it also has the backing of Visa – and Vibrant is leading the roll-out.

The business is proud to do so and sees a huge opportunity. Micro businesses are now worth £1.85 trillion to the European economy[ix]. Their importance will grow, and they need the payments sector to take note of their needs and do better. It’s no longer acceptable to foist poor products and services upon them and allow the pandemic to drive change rather than innovation.

The explosion in local retail demands new payment methods – and they must be made available. In many ways, it’s a scandal that it took a pandemic to force change.

 

[i] 40% of the UK’s micro businesses do not accept card payments
[ii] Visa data
[iii] 40% of the UK’s micro businesses do not accept card payments
[iv] Credit card processing fees
[v] Local heroes: The retailers benefiting from the rise of localism
[vi] Lumina Intelligence UK Grocery Data Index for 2020
[vii] Contactless payments dominated as lockdowns eased
[viii] Visa data
[ix] Visa data

Continue Reading

Magazine

Trending

HOW TO TELL IF YOU’RE OVERPAYING TAXES HOW TO TELL IF YOU’RE OVERPAYING TAXES
Finance20 hours ago

HOW TO TELL IF YOU’RE OVERPAYING TAXES

Paying taxes is a necessary act in our world, and with good reason. Our governments use taxes to build the...

Nigel Cannings the founder of Intelligent Voice Nigel Cannings the founder of Intelligent Voice
Technology3 days ago

HOW ARE SPEECH RECOGNITION AND AI FIGHTING FRAUD?

Nigel Cannings is the founder of Intelligent Voice   Speech recognition and AI provide innovative methods for businesses to significantly...

HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU? HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU?
Business3 days ago

HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU?

Atul Bhakta, CEO of One World Express   The build-up and aftermath of Brexit impeded the long-term plans of businesses...

BUSINESS DEVELOPMENT + MARKETING + COMMUNICATIONS BUSINESS DEVELOPMENT + MARKETING + COMMUNICATIONS
News3 days ago

BUSINESS DEVELOPMENT + MARKETING + COMMUNICATIONS

Volante Technologies Recognized as Market Leader in Omdia Universe: Selecting a Payment Hub, 2021-22 Report Cloud payments company scores highest...

Dima Kats, CEO, Clear Junction Dima Kats, CEO, Clear Junction
Top 103 days ago

2022: A FUTURE FOR SIMPLE AND FRICTIONLESS CROSS-BORDER PAYMENTS

Dima Kats, CEO, Clear Junction   Even after 18 months of stuttered lockdowns, businesses are still learning how to navigate...

Christmas Gifts Christmas Gifts
Top 103 days ago

CHRISTMAS IS COMING: WHAT MAKES A GREAT ECOMMERCE STRATEGY FOR THE FESTIVE SEASON?

By Laura Lough, Director of Ecommerce Operations at Digital River   There is no doubt the year 2020 presented an...

Stefano Maifreni, founder of Eggcelerate Stefano Maifreni, founder of Eggcelerate
Technology3 days ago

IS THERE A CASE FOR APPOINTING A DIGITAL TRANSFORMATION OFFICER?

Stefano Maifreni, founder of Eggcelerate   You can tell the business world’s direction by the new roles that start to...

Business3 days ago

WHAT FIREFIGHTERS CAN TEACH FINANCIAL INSTITUTIONS ABOUT DATA COLLABORATION

Gabriele Albarosa, CEO, LiveDataset   Digital transformation can be difficult for any business, but in the financial services industry it...

Top 103 days ago

HIDDEN COSTS WHEN INVESTING… AND HOW NOT TO GET HIT

By Annie Charalambous, Head of Communications at ETX Capital   According to recent figures, Brits plan to increase their investments by almost...

INSURANCE TRENDS 2022 INSURANCE TRENDS 2022
Top 104 days ago

INSURANCE TRENDS 2022

The Insurance market will continue to grow in maturity based on the richness of solutions by InsurTech In 2022, we’re...

News4 days ago

ARTERIA AI SET TO ACQUIRE H4’S FINANCIAL SERVICES BUSINESS ASSETS

H4 Chairman and Co-founder Joe Seifert to join Arteria AI as senior advisor   Arteria AI, an award-winning global leader...

News4 days ago

PAYNET PARTNERS WITH CLEAR JUNCTION TO FACILITATE CROSS-BORDER PAYMENT SERVICES

Clear Junction announces new partnership with Paynet The partnership helps Paynet provide remittance services to typically underserved communities   Clear...

News4 days ago

GAME CHANGING: WORLD’S FIRST ON MOBILE DEVICE NEURAL TEXT-TO-SPEECH SYSTEM RELEASED BY CEREPROC

CereProc has today launched the world’s first on mobile device neural Text-to-Speech (TTS) system commercially available for Android and iOS operating...

News4 days ago

VIRGIN MONEY ADDS ACCELERATED PAYMENTS TO ITS FINTECH PARTNERSHIPS

An Invoice Finance provider addressing cash flow issues in business Partnership forms part of Virgin Money’s working capital health proposition Virgin Money...

Business4 days ago

B4B PAYMENTS PARTNERS WITH SENTINELS TO SUPPORT ANTI-MONEY LAUNDERING COMPLIANCE ACROSS EUROPEAN MARKETS

Sentinels’ risk-based model boosts accurate detection rates and provides flexibility to monitor transactions across all B4B Payments’ solutions Sentinels, Europe’s leading...

Business4 days ago

EPI: HOW TO BUILD TRUST AND ADOPTION AMONG CONSUMERS AND MERCHANTS

By Arnaud Crouzet, VP Security & Consulting at Fime   What is EPI? The European Payments Initiative (EPI) is aiming...

Interviews4 days ago

BATON SYSTEMS 2022 OUTLOOK

Responses provided by Jerome Kemp, President, Baton Systems   Q. Organisations are forecast to spend nearly $6.6 billion on blockchain...

Finance4 days ago

WHY THE EXPLOSION IN LOCAL RETAIL DEMANDS NEW PAYMENT METHODS

Kasper Enggaard Krog, CEO at mobile payment and business technology firm, Vibrant, explains why micro businesses are being badly let...

Business5 days ago

IS SCARCITY OF TALENT THREATENING THE UK’S FINTECH CROWN?

Opinion From Rafa Plantier, Head of UK and Ireland at Tink   From the Square Mile to Canary Wharf, London...

SET YOUR BUSINESS UP FOR SALES SUCCESS IN A POST-PANDEMIC WORLD SET YOUR BUSINESS UP FOR SALES SUCCESS IN A POST-PANDEMIC WORLD
Business1 week ago

SET YOUR BUSINESS UP FOR SALES SUCCESS IN A POST-PANDEMIC WORLD

Dean Fiveash, Head of FinTech Sales, IFX Without doubt the Coronavirus pandemic impacted every aspect of our lives and fundamentally...

Trending