Preparing your bookkeeping function for the unknown

Change is on everyone’s mind, and with evolving technology and continuous reinvention, it can often feel like the only constant is change. 

Whether you’re in the C-suite or back office, the impetus to reinvent is intensifying. In PwC’s 27^th Annual Global CEO Survey, the results suggest that many companies are already taking some steps toward reinvention. We asked industry leaders to indicate the extent to which the following factors have helped drive or will drive changes to the way their companies create, deliver and capture value looking back five years and ahead over the next three: 

• Technological change 

• Change in customer preferences 

• Government regulation 

• Competitor actions 

• Climate change 

• Supply chain instability 

• Demographic shifts 

Technological change was the single biggest factor that many CEOs around the globe were focused on. In fact, 56% said that technological change will drive the way their companies create, deliver and capture value in the next three years. 

The stakes are high, but so is awareness—from the C-suite to the back office—of both the urgency to change and the need to deliver sustained outcomes. And in the private company bookkeeping function, embracing change can be just as important as it is to large, global organizations. 

As business leaders, we should recognize the importance of accuracy, efficiency and adaptability. We know that staying ahead of the curve can be crucial. But we need to have insight into where we are and where we’re headed so we can prepare for the change ahead. And this is where emerging technology becomes an important factor. 

Three keys to getting the most from your bookkeeping function

So, what does “embracing change” really mean for your business, and how can this help? Preparing for change depends on your willingness and ability to evolve. But there’s more: to avoid inertia, you should always be looking for better ways of doing things and preparing your team to leverage emerging technology. 

It can come down to these three pillars: people, processes and technology. These key components function much like the legs of a tripod. If all three legs aren’t stable and in balance, the results can be less than satisfactory. 

Effective bookkeeping can empower your business and fuel its growth, but many organizations struggle when applying new technologies if they fall short in any of these areas. While innovative technology can help provide the tools your business needs to manage its financial data in an impactful way, accurate data—along with the people and processes behind it—can build the foundation for success. Let’s look at how you can leverage each of these three pillars to unlock new opportunities and be better positioned to take advantage of your data: 

1. Embrace new technology—and the cloud 

2. Focus on continuous process reinvention 

3. Hire (and upskill) the right people and make your culture a catalyst for change

1. Embrace new technology—and the cloud 

How can you make sure the technology you use today can help you prepare for what’s next? A solid foundation begins with the right technology, and emerging technology is data centric. 

From a back-office perspective, you need data that’s accessible—and reliable. Keep in mind that poor-quality information or input can produce output of similar quality. To get more value from your data and yield reliable outputs, you should improve data quality and structure your data.

It starts with the cloud. In PwC’s 2023 US Cloud Business Survey, 78% of executives told us their companies had adopted cloud in most or all parts of the business. They report fewer barriers to realizing value, and they’re doing so at a rate twice that of other companies. This doesn’t mean you won’t see positive results if you don't go all in; there can still be value in making the move. 

Cloud-based bookkeeping tools can offer services for paying bills and invoices, payroll, expenses, accounting and collections all on the same platform. And these tools can help reduce costs and provide your billing practice enhanced security, accuracy and efficiency. Cloud technology can help you to: 

• reduce redundant manual data entry 

• automate your expense recording, accounts receivable and accounts payable (no more paper checks!) 

• track your transactions 

• connect your bank accounts and credit cards 

• integrate with other cloud-based tools 

• leverage insights 

Once your data is cleaned up, in the cloud and structured, you can leverage it to gain insights quickly, find answers to stakeholder questions easily, spot trends early and make key decisions for your business. Next, you can think about reporting. 

You need the ability to update and automate reporting, which can help eliminate manual errors and adjustments. This can also better position you to gain insights from the data, so anyone from the C-suite to the bookkeeping function can look at the data and see what’s happening, read the trends and understand where you’re headed. And then your decision makers can help determine the right path forward. 

2. Focus on continuous process reinvention 

How do you reinvent your processes to future-proof your business? Technology is key, but if you don’t have a plan to get data into a system, you may not get information out. You need an effective end-to-end process for desirable results.  

The right processes can help create efficiencies and mitigate risk, but you first need to know the outcome you want and tools you have—and design an efficient process around that. You should ask: What’s the outcome we’re looking for—and are our processes delivering that? 

If your current processes are having a negative impact—like manual data entry errors or not delivering your desired outcomes—determine which steps you can automate. 

Let’s take the accounts payable (AP) process. If we don’t pay our vendors, we’re not going to get the services or goods we need. And there’s a couple ways to do it. You can do it the hard way—manually—and physically sign off every invoice, write paper checks that need the appropriate signatures and mail payments to your vendors. This meets the objective of paying the bills, but there can be a better way.

There can be risks associated with making decisions based on bad information or unclean data, not to mention the time involved in executing manual processes. You can risk: 

• Paying the wrong vendor—or the wrong amount 

• Paying your vendors too early and then impacting your company’s cash flow  

• Not achieving your desired outcomes or objectives 

Put simply: Good processes can help mitigate risks; bad processes can create new risks. 

3. Have (or train) the right people and make your culture a catalyst for change 

How do you make sure you have the right people to use your improved technology and processes? People are the most important part of your bookkeeping function. You could have the latest technology and a perfectly designed process, but without the right people, you cannot reap the full benefits.

Consider this: You’ve just completed a big system implementation and process redesign. You need a team to operate your chosen technology and your carefully designed processes efficiently and effectively. If you don’t have the right resources or fail to hire or upskill the right people, you’re not going to get the desired results—or worse. 

• You might have a great bookkeeper, and your financials might be perfect. But if your "great bookkeeper" is stuck in their ways, they might not be the right person. If they look for workarounds, continue to do things "their way" on the front end or upload manually manipulated data, they can miss the point and expose your business to risk. 

• Maybe you have a full team of top-shelf CPAs. But if they aren't willing to work with the tech and processes you have in place—or use them to their full potential—they're exposing you to risk. Or you could be missing earlier access to data, which could influence decisions. 

• Don’t assume your tech stack and processes alone can carry the day and make the mistake of hiring a less-experienced bookkeeping resource. Keep in mind that your business is responsible for your bookkeeper’s errors, missed payments and noncompliance. 

• Or what happens when a member of your team leaves unexpectedly or is out for an extended time on planned sick or family leave? 

It’s a balancing act. To be prepared for the unexpected—and to help your business succeed—you need the right combination of people: those who possess bookkeeping proficiency and who are open to embracing your tech and processes. 

Managing “change fatigue” and resistance to technology. 

You should make sure you have the right technology, processes and people in place so you can get the desired results from leveraging the emerging technology and changes that are coming in the next three years and beyond. But a word of caution: Change fatigue can be a significant issue. 

Evolving customer needs, rapid technological advances, intense competitive pressure and geopolitical crises are forcing companies to redesign their structures, processes and culture on a continual basis. If the tone at the top is that you need to modernize and change, but this isn’t communicated clearly, your team might be scared about what this means for them and their job security. And this could make your people resistant to embracing change or new technology. 

Keep in mind that your employees aren’t just along for the ride—they’re the engine of transformation. You should get buy-in from the top down and the bottom up to build support. If your people don’t follow the process, you’ll only succeed at wasting all your capital on gridlock. Approaching the conversations and interactions you have with your people from a place of honesty is key. You should be upfront, address concerns and convey the vision of where the desired change is going to bring your team and the business.   

If your people understand this, they’ll feel valued and respected. And it's more likely they’ll help lead and promote change instead of resisting change and succumbing to inertia.