Home Education AI, blockchain and forecasting the future: why management accountants are getting better...

AI, blockchain and forecasting the future: why management accountants are getting better at thinking about tomorrow | For the love of numbers


For millennia, we’ve relied on accountants to act not only as number crunchers, but also as diviners. After all, if you don’t know what’s going on with your finances, you don’t know what’s going on with your business – and what might happen to it in the future.

“The numbers tell the story of what’s going on in the business,” says Martin Bown, a management accountant in Huddersfield. By helping companies understand not only where their business is now, but where it might be going, Bown is a trusted guide to his clients on what the future holds.

“Funding comes in two parts,” says Simon Bittlestone, CEO of accountancy platform Metapraxis and vice-president of the Chartered Institute of Management Accountants (CIMA). “We need to clarify the numbers and do something about them.”

And it’s the latter that defines the role of a management accountant: “To support business decision-making, help make better decisions, better manage performance and improve results,” says Bittlestone.

As with many professions, day-to-day work is changing with the proliferation of new automation tools and machine learning technologies. This technological transformation of finance presents enormous opportunities for management accountants whose job it is to make predictions.

“The fundamentals of forecasting haven’t really changed,” says Bown, founder of My Management Accountants. “The questions we ask and the data we need to collect to make a prediction remain the same.”

However, how the forecast is made and how the future is modeled are also different.

New forecasting tools
Bown uses specialized accounting software to gather the data he needs, an AI-based character recognition tool to automatically process incoming invoices, and a forecasting platform to help him visualize different outcomes.

Simon Bittlestone: How does your company create value?

With artificial intelligence and other computationally intensive statistical tools now available to management accountants, making complex predictions is becoming easier. And importantly, artificial intelligence can help management accountants separate the signal from the noise in the data.

“Being able to model your business, incorporate data from many different sources and run much more powerful and sophisticated algorithms on it can be a game changer,” says Bittlestone. “The power of analytics, both in terms of data integration and modeling, can significantly improve the finance department’s ability to add insight.”

He adds, “A management accountant can add the most value in helping to understand what data matters. It has to start with the basics. How does your company create value?’

One system that can affect how work is done is the blockchain. “It’s still debatable how big of an impact blockchain will have on a company’s internal accounts,” says Bittlestone. “It’s a fundamentally new governance model, so it’s most valuable when there are multiple untrusted parties to record transactions between them.” Therefore, inside companies where this trust already exists, there is no need to record the information in the blockchain. But Bittlestone can foresee a future where the technology will become useful because everyone in this market is using it.

“[If you] get into a scenario where the entire market [has] transactions recorded on the blockchain, then it potentially makes a lot more sense because you can feed that automation right into your internal ledger.”

A critical factor
While technology is driving significant changes in the industry, management accountants are still critical to understanding what the numbers are telling us.

Martin Bown, founder and MD of My Management Accountant
Martin Bown: “The numbers tell what’s happening in business”

“The fact that in the future we will have running algorithms and automated layout of most books does not mean that you should not understand why and how you do it because it helps you make sure it’s right,” says Bittlestone. “And communication is the main thing. This is often forgotten and seen as secondary to the basic accounting skill set. If you can’t communicate effectively with the business, you will fail.

“The role of a management accountant is not just about using data wisely. The only way it adds value is if it’s delivered to the right people in a format they understand and can help them make the right decisions.”

Bone credits CIMA training with helping him develop the skills he needs.

“It gave me the insight to step away from the numbers and not just focus on them,” says Bown of his CIMA CGMA professional qualification. “It made me more commercially focused so I could take on other roles in the business. Whether you’re going into production, sales or a commercial team in a larger business, it’s a more comprehensive qualification.”

Ultimately, while it’s important to learn about new technologies that are changing the profession, the vital skill is not so much knowing how to work with them, but how to apply them.

“Does every management accountant need to know how to use these new technologies? No, says Beatlestone. “Should every management accountant know where to apply them? And how to do it most effectively? Of course.”

Find out more about the Institute of Chartered Accountants’ courses and qualifications in management accounting and how they can help you transform your career in business and finance at cimaglobal.com

Source link

Previous articleOnly 1 in 5 female students are considering a career in the data industry – FE News
Next articleThe Ebersole family is an example of how the bond between father and son never fades