Finance departments are kicking off the first quarter of 2018 with big plans and aggressive goals to make this year the best year yet. CFO’s are focusing on answering the ageless question: “How can the company make more and spend less?’ The key is working smarter, not harder, to stay in the competitive ‘Game of Growth.’ As much as we want the speed of finance departments to be equivalent to an all-star running back, it’s impossible without the star player – technology.
Technology has come a long way. Twenty-five years ago, we were listening to a dial-up tone to connect to the Internet. Ten years ago, we were getting the hang of social media and smartphones. Today, we’re using technology to make decisions and complete tasks with the click of a button at home and work.
Technology is changing rapidly, but not as fast as buyers’ demands. Customers are demanding that companies produce more, faster, and better than before. In order to win, companies must exceed their expectations, especially in the B2B world.
With this in mind, we’ve listed the top finance trends that your financial department needs to stay on top of to make 2018 the best year yet.
Businesses are on the brink of buying into the latest digital dynamic duo
In short, cryptocurrency is an encrypted digital payment method. Instead of the bank or government handling transactions, a set of computers and ‘miners’ do all of the virtual processing. The goal is to provide secure transactions using blockchain – a secure database of records and transactions that uses cryptography to protect information and processes. A lot has happened in the blockchain world since its launch in 2011, and this year its growth is proof that 2018 may be the biggest blockchain and bitcoin year yet.
Cryptocurrency is the easy, digital payment form that is changing the way businesses and consumers pay online. Bitcoin is one of the largest and most popular forms. According to Bitcoin COO and co-founder, Chris Kline, bitcoin grew from $900 at the beginning of 2017 to $6,300 by the beginning of Q4. Kline predicts that bitcoin will become widely accessible as a form of electronic payments for businesses in 2018.
“In 2018, we expect to see a dramatic increase in oversight and regulation for cryptocurrencies, and as a result, we expect to see established financial institutions invest billions of new money in the space.”
According to a recent Forbes article, blockchain is projected to grow 61.5% annually through 2021. Predictions are that more industries will accept blockchain and reap benefits of easy access, auditing, and approving by all users. How? A recent study shows that blockchain gives suppliers data, visibility, and competitor insights for more peer-to-peer (P2P) transactions.
In 2018, businesses must begin to see consumers as potential competitors. Many people who are interested can crack the blockchain code for entry into the B2B world. As customers look for more ways to make money, they are initiating peer-to-peer transactions that will take place more often using blockchain and cryptocurrencies, like bitcoin, to securely make high-value transfers.
The growth of bitcoin, along with cryptocurrency and blockchain means major concerns for businesses and finance departments. If your business is looking into getting on the list of those that accept cryptocurrencies, there are a few things to keep in mind. The value of cryptocurrencies changes depending on factors, such as security and market. As trust rises, so does market value and cost.
Adopting the cryptocurrency and blockchain duo in 2018 gives finance departments the added bonus of having a central hub for many users to access, audit, and approve secure transactions. As more businesses adopt blockchain and other cryptocurrencies, the forms of electronic payments will broaden for businesses. Thus, calling for your finance department to either consider getting on board with this finance trend or perhaps fall behindg.
Finance departments must live on the edge or in the cloud
The cloud is not new to financial professionals, but the speedy progression is a finance trend worth noting. Since the cloud’s millennial developments using Amazon services, the cloud is being used as a service, software, and storage. Financial departments often use public and internal cloud services to increase visibility and collaboration for big data, reporting, and forecasting. Since the cloud has matured, there’s less concern about data breaches thanks to increased trust and security. In a recent Robert Half and the Financial Executives Research Foundation (FERF) study, more than half of organizations from all company sizes said they are currently using cloud technology. 72% of finance leaders are either currently using cloud tech or plan to.
IDC predicts that in 2018, more than half of enterprise-level IT companies will have embraced multiple cloud services – changing the way companies store and share data. IDC pointed out the big change in 2018 cloud purchasing – buyers will be business managers, not the IT department that tried to sell businesses on cloud technology almost a decade ago. This year, IT departments will continue to trust the cloud by making big investments in cloud services and software by at least 40% – planning to be well over half of IT support and services by 2020.
Finance departments are predicted to use 2018’s cloud technology advancements for big data to gain insights for bigger business bets. For finance professionals, it’s beyond data storage and security. It’s the ease of collaboration and control of sensitive financial documents and data that encourages implementation. Use of the cloud in 2018 opens doors for secure, simplified automation processes for accounting workflows and up to date compliance.
Use of the cloud will be a big finance trend in 2018, but not without competition. The next up and coming trend is edge computing. Instead of holding the processing power on a cloud, edge computing processes data and services on the edge of a network – closer to the end source or user – a big difference between cloud computing and edge computing. Data and processing speed is accelerated – providing quicker insights for larger amounts of data. This process improves security by almost never making the user put processed data in centralized storage – like the cloud. It goes straight from the device to the network for processing to the end user.
What’s in store for edge computing in 2018? There are arguments that edge computing will replace the cloud in the near future for fast and secure processing. Although the success of edge computing is yet to be determined, finance departments should stay up to speed on what’s to come.
Businesses save money and time with the new ‘know-it-all’ – RPA
The robot is gaining momentum and capabilities that raises the big question: “Will accountants become obsolete?” The answer depends on who you ask. The new ‘thinking machine’ is taking the liberty to complete tasks that AP strategists usually handle — but for a fraction of the costs. The robot is now crunching numbers and producing data while humans spend hours creating formulas and spreadsheets.
Finance has big plans for Robotic Process Automation (RPA) for 2018. It’s safe it say that RPA’s impact is big. As robots learn more, they will be able to complete tasks that humans do in a fraction of the time. In the coming years, RPA will have the ability to manage forecasting, reconciliation, and data reporting. According to Forbes and a recent Forrester Research report,
“Automation will eliminate 9% of US jobs, but will create 2% more.”
The 2% growth comes from technology-related jobs that support automation, and RPA will add 500,000 US “digital workers.” The article also predicts that by the end of 2018, the RPA software market will increase to $1.06 billion.
Businesses have included the robot in their budget for 2018 to boost efficiency to reduce the heavy workload and manual mistakes. According to KPMG, RPA can cut financial costs by up to 75%. RPA minimizes processes in the finance department including accounts payable automation – the process of paying suppliers and vendors for goods and services. Finance departments are automating payment processes, compliance, and reporting with the click of a button.
Finance departments can leverage RPA in 2018 in a number of ways. According to a Softomotive and CFO study, best practices to implement RPA include short-term solutions for another IT efficiency solution, testing the impact of digital before transitioning or to serve as an assistant to full-time employees. The key is efficiency at minimal cost.