Get your finance tech to deliver foresight, not hindsight says Thomson Reuters
Hari Ganesh Kumar says automated systems should tell you there's a problem before you know about it.
Technology is the enabler that allows both finance and tech teams to operate more efficiently. Reporting is evolving and the requirements on finance teams are increasing.
“Finance teams used to have to get out a five- or ten-page report, that no one would look at for six to 12 months. Now standard financial statements are 30 to 50 pages long and for a listed company, you’re looking at 80 to 100 pages of disclosures, which different role players then need to act on. And government agencies now want this data in an electronic format, so that they can run their own analyses,” says Hari Ganesh Kumar, the enterprise proposition lead for corporates at Thomson Reuters.
However, any new technology that an organisation implements has a learning curve. During that period, your team will be less productive than it used to be. Most organisations look at this as an immediate failure of adopting technology even though they’ve only used it for one reporting cycle. Organisations need to look at the longer term and accept that it might take a few reporting cycles for teams to adapt fully to the technology and be able to do a lot more with their resources and time.
“This is a theme that’s certainly playing out for finance teams right now,” says Hari. “If you think about trends happening globally and in South Africa, government organisations such as revenue and tax authorities are looking to get more data in real time from companies to make sure that they are paying their fair share of tax, and that they are complying from a regulatory perspective.”
The technologies that companies can use to comply with these regulatory requirements come in three phases, he explains.
The first is “hindsight”, which is essentially looking at data retrospectively, using manual processes and controls.
The next step in the digital evolution is “insight”, which makes use of automated detective measures and processes. And finally, there is “foresight”, which uses automated preventative measures and systems.
“Most organisations are still operating in hindsight. They are still using manual processes and controls, relying on solutions like Excel. Few venture into advanced analytics, robotic process automation (RPA) or artificial intelligence (AI) or try to do things smarter. To take advantage of these new technologies underlying systems should have data stored in a structured manner so it can be interrogated. Excel fails at this, whereas software solutions for tax and accounting compliance in their very nature are designed to enforce consistency.
“Where clients could or should be today is in the insight stage, where the checks and balances have been built in to their solutions, they are certain that the numbers are correct, and can spend more time on what story the numbers tell the business and external stakeholders.”
He says that where companies want to be in future is having automated preventative measures and systems in place. “The systems will tell you before you realise that you have a problem. That’s when the true power of AI and robotics comes into play.”
Thomson Reuters provides the intelligence, technology and human expertise to support customers on their technology journey, with the ultimate goal of giving them access to their own, actionable information.
“Our goal is to try to get our clients to think about how they can get on this technology journey, and to provide what we can to help them to succeed on that path,” says Hari.
Thomson Reuters is a silver partner at the Finance Indaba, taking place on 16 and 17 October at the Sandton Convention Centre. They will be available to talk to attendees about how their organisation can benefit from new technologies to help with local and global tax and accounting compliance requirements.