Company Culture

Digital transformation: How AI will supplement (not supplant) the role of the CFO

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Artificial Intelligence (AI) continues to revolutionize the financial realm. And as a result, the role of the CFO is evolving, too.

AI is changing the organizational structure of how financial departments function. It’s allowing businesses to work smarter and faster, enabling their transformation into full digital organizations. But as technology fulfills core accounting jobs, what does that mean for the future of the CFO?

There are some shoes AI will never fill
The rise of AI is not likely to replace the CFO, but rather create a strategic partnership. Even as robots get smarter and more economical, they’re not equipped to take on every function.

According to a recent McKinsey report, the determining factor in whether a job is likely to be replaced is the type of work involved. The more predictable and repetitive the job, the more likely it is to be taken over by automation. So, it’s safe to say the core functions of a CFO will not be automated any time soon, and here’s why:

Decision-making skills are difficult to program. Not every question or business challenge can be broken down into quantifiable factors for AI to solve. AI isn’t capable of making judgment calls and tackling decisions that can impact an entire organization. There will always be unexpected problems to solve and machines will never replace human judgement.

Machines can’t easily adapt to the unexpected. Consider the self-checkout lines at big retailers. While they may help move lines faster and lessen crowds, they’re also susceptible to theft. It’s too easy for someone to input the wrong code and make off with a sizeable discount. What does that mean for more complicated machines? System flaws within AI are often unavoidable.

Humans prefer to deal with other humans. When it comes down it, people put more trust into the ideas and intuition of other people rather than machines. While robots are entrusted with smaller duties, it’s unlikely that any company would trust AI with taking over critical tasks.

The true value of AI is enabling CFOs to analyze data in more valuable ways. But this insight is worthless if you’re bogged down with daily accounting operations, like managing financial transactions and producing reports. With technology taking over the grunt work, you’ll be poised to lead change within your organization.

Working in tandem
Today’s CFO is responsible for contributing to company growth and increasing profits. AI provides the actionable information to support decision-making to reach organizational goals — but not take it over. Machine-learning algorithms lend the power to analyze, interpret and make predictions to improve operations and productivity. With AI, the CFO gains:

  • Increased efficiency. As low-priority responsibilities are automated, time is freed up to concentrate on more strategic and revenue-generating tasks.
  • Improve planning. Accurate and reliable data offers higher visibility to detect anomalies, pinpoint inefficiencies and make better planning and forecasting decisions.
  • Smarter fraud detection. The ability to verify information in real-time and ensure compliance can help mitigate risk and prevent fraudulent activity.
  • New ideas. AI can make sense of volumes of data, initiating new ideas and possibilities.
  • Internal reliability. Use data as proof points to build trust with stakeholders and justify key business decisions.

The bottom line
Al gives CFOs a huge advantage. By harnessing the power of data and automation to rise above tedious tasks, they can move into the future with more certainty and maximize their contributions to the success or their organization.

Is the NJ brain drain dooming your organization’s future workforce?

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Sure, the taxes may be high, but by and large the Garden State is an opportunity-filled place to live and work — especially for NJ-based companies that require a wide range of skill sets across their workforce.

But when we’re the only state losing 20,000+ students annually to out-of-state colleges, what’s the impact on future hiring? This so-called “brain drain” — high school students heading across state lines for their higher education — has been going on for decades. Combine that with the mass exodus of more than 500,000 millennials, and you don’t have to be an economist to predict the looming impact on the state’s labor pool — talent shortages, skilled positions going unfilled and costly retention issues as employees realize who’s in the driver’s seat.

This phenomenon is also expensive from a tax standpoint. New Jersey spends roughly $19,000 per student on K-12 education, landing it at the top of the list for per-pupil spending. That’s a steep investment in a future workforce that’s not guaranteed to stick around.

Why are so many students choosing to attend college elsewhere?
One reason is proximity, according to Joyce Strawser, Ph.D., dean of the Stillman School of Business at Seton Hall University. She says, “It’s so easy for a NJ high school graduate to enroll in a great university located within a two- to two-and-a-half-hour drive. That student may likely feel that he or she has the best of both worlds — the exciting opportunity to live and learn in another state, while maintaining the safety net of being a short drive or train ride from home.”

On the positive side, Strawser feels that the issue speaks to the quality of graduates the state produces. “Our high school students are academically competitive — attractive candidates who are heavily recruited by nearby colleges and universities.”

Shifting the tide to in-state higher education
In-state colleges are the first line of defense in attempting to reverse the talent exodus. And many, including Seton Hall, are getting creative in raising their profiles among high school students, moving beyond the typical “Open House” and hosting high-interest programs that bring these students to campus.For example, Strawser’s Stillman School hosts a half-day visit for Bridgewater-Raritan High School students twice a year — and has seen enrollments from that school district increase significantly as a result. Stillman also presents an annual “Strictly Business” program, a half-day immersive introduction to programs, faculty and students, during the New Jersey Education Association Convention.  “Because many of our high schools do not hold classes during the NJEA event,” she says, “it’s a convenient time for NJ students to visit our campus.”

Future-proofing your NJ workforce
If you’re planning on remaining an NJ-based company, now’s the time to think proactively about the future of your workforce. Though you can’t control where students choose to attend college, you can take steps like these:

  • Benchmarking —Examining both industry-specific and general market data can help you ensure your compensation and benefit packages are competitive or better.
  • Succession planning — Identify mission-critical roles across your organization and the skills necessary to succeed in them, then map out (or recruit, if you don’t find any) potential candidates to develop.
  • Organizational soul searching — What would it take to become known as an employer of choice? Whether that’s reinforcing your commitment to social responsibility, improving organizational culture or raising your profile by engaging a strategic PR firm, these tactics don’t yield results overnight. Start now so you’re positioned for success.

With so much home-grown talent and potential, it’s a tough loss to see other states — and their business communities — reap the benefits of NJ’s educational system. Our state is a difficult enough place to do business without the added stress of a workforce lacking the skills we need to remain competitive.

 

 

 

Client Accounting Services 101: The secret to working ON your business rather than IN your business

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You’re probably familiar with the business-owning wisdom of author Michael Gerber — that entrepreneurs build enterprises while technicians build jobs. And most fail because they spend too much time working in the business rather than on it.

The day-to-day operation of a business is a handful, especially if you’re hands-on doing the grunt work or supervising a junior staff member. If you’re like most business owners, financial and accounting responsibilities tend to end up at the bottom of the list of things to do.

Millennial business owners get it. They want to focus on high-value tasks, not mundane work. They understand the value of strategic outsourcing, like Client Accounting Services (CAS), which give business owners more time to focus on business-developing sales and growth strategies.

CAS provide real-time data and accounting solutions to aid business owners in keeping their finances up-to-date while allowing them the time and flexibility to continue to run their business. CAS is convenient and can be customized to meet your business’s specific needs. In today’s fast moving environment. Our cloud-based solutions provide business owners accessibility from wherever they desire. Depending on the service level selected, our services provide for strategic solutions based on what the business owner needs to grow or maintain their business.

From bookkeeping to accounting to payroll to CFO-level services, we help entrepreneurs meet the daily demands of running the business. Using our financial flash reports and dashboards, data is available to you with a click of a button. Best of all, you don’t have to deal with the headaches of training, hiring and supervision.

Magone & Company changed how we provide services to our clients with the advent and progression of cloud solutions. Our CAS was created to take advantage of what the cloud has to offer so we can streamline the accounting and finance accounting for your business and help you operate efficiently. It allows us to collaborate and have interactions with our clients. Your problems are addressed right away, and you no longer have to rely on outdated financial statements.

Some of the examples of how CAS allows Magone & Company to build better relationships are: flash reports and dashboards to see how the business is performing; cash flow analysis for growth; and regular check-ins to address tax and strategic concerns throughout the year.

Advantages of CAS (depending on the service desired):

  • 24/7 access, giving you more visibility into your financials
  • Mobile friendly
  • Designated skilled accounting team member
  • Bill payment, payroll, general ledger maintenance and bank/credit card reconciliation
  • Cash and cash flow management
  • Financial statements
  • Close monitoring and analyzing of Key Performance Indicators (KPIs)
  • Preparation of custom reports
  • Electronic document delivery; less paper to file
  • Easy to read and painless year-end reporting
  • Keeps costs down
  • Enhances profitability and productivity
  • Freedom to work the way you want

CAS changed our business. Want to see how it could change yours?