25 years ago we developed a systems concept of event driven accounting. A key principle was the de-coupling of proprietary and often hard coded accounting engines from the source systems allowing firms to standardise on a set of common accounting rules across multiple business lines, divisions and geographies – one set of accounting rules delivering a global P&L with adjustments for local GAAP where required. The concept led to the development of our first best of breed accounting rules engine in 1998.

Our home in those days was largely the financial services sector, where accounting was most complex. Accounting for derivatives and other structured financial products is not a simple matter of debit this account and credit that account but a web of financial transactions and cashflows that were to be accounted for over a varying period of time and that were subject to change at any stage from business or market events. A dedicated accounting rules engine delivered transparency, strong audit trail and accuracy of financial impact.

If the concept had been adopted on a much wider basis perhaps the catastrophic financial impact of mortgage back securities , CDOs and CDSs that even the Masters of the Universe failed to recognise, would have been less during the last financial crisis.

Wind forward 20 years and Accounting Change is at an all time high. New IFRS standards are coming thick and fast and impact multiple business sectors. Firms are facing a significant challenge in meeting these new standards.

In simple terms the back office has not kept up with the front office. Increased consumer choice and multiple delivery channels means products sold are of increasing complexity. Overlay compliance, audit scrutiny and the changes in accounting required by IFRS 9, 15, 16 and 17 and the finance department is between a rock and a hard place.

Legacy systems, poor data quality and inefficient processes mean finance still largely operates on a summarised historic basis that cannot meet the level of reporting granularity and timelines that modern business and the new accounting standards require.

IFRS standards mean organisations require a major overhaul of their finance systems. None more so than the latest IFRS 17 standards for Insurance Contracts.

So why am I as excited about the opportunity for accounting and finance transformation as I was all those years ago.

Technology has now allowed us to take accounting rules platforms to the next generation and deliver a solution that allows firms to embrace accounting change in a positive and transformational manner rather than just viewing it as a costly compliance overhead.

Processing performance is no longer an issue. The use of in memory data grid processing has allowed us to deliver the levels of ultra-high processing power and scalability that previously were only the domain of the front office and client facing systems. Cloud deployment has delivered on demand computing and the chance for truly rapid global deployment. Combined with open source infrastructure and subscription licencing, the cost of ownership is being driven down to levels that could never be achieved previously.

Accounting Rules technology is entering the Perfect Storm, where pressures of compliance, product innovation and legacy systems mean change is mandatory.

So if you are working out ways to deliver your new IFRS standard or struggling with an existing accounting change project there is no need to re-invent the wheel. A concept we started 25 years ago has really Come of Age.

Jeremy Wood is a senior IT industry executive with over 30 years’ experience in building innovative software businesses. He has an established track record in technology start-ups, with his most recent firm, Legerity Limited, being his fifth.  He is a previous winner of the prestigious Ernst & Young Entrepreneur of the Year award and was a finalist in the UK’s 2017 Technology Enterprise Awards.