As the world enters a period of heightened economic uncertainty, rising inflation and vulnerability to market swings means many businesses are now re-evaluating their strategies and looking for ways to optimise their operations internally. Within this context, leaders need to feel confident that they are making the right financial decisions for the organisation. That is why the optimisation of Finance and Accounting (F&A) should be at the top of every organisation’s agenda. Particularly for medium sized businesses that need to remain competitive and be able to grow with confidence.
Ideally, before deciding on any business strategy, a company would have access to up to the minute financial data that can help to inform its next move. Agile businesses that can be proactive and/or react immediately tend to do better than those that are delayed in their decision making. However, for businesses that are still wrestling with decades-old accounting processes, that’s simply not possible.
Sure, you can look back at last month’s figures and make an educated guess, but educated guesses aren’t enough. You don’t need to know where the organisation was in the past. You need to know where it is right now. Real-time visibility makes it possible to spot issues as they arise and to quell them before they grow.
Traditional accounting tools don’t just leave you flying blind. They are also time-consuming and labour-intensive and, most crucially, they prevent you from being able to show your true professional value. The best F&A teams are increasingly positioning themselves as a key strategic partner, uniquely able to analyse business performance and then provide recommendations based on that data. But that’s simply not possible if you are constantly bogged down in excel spreadsheets.
Modern Accounting on the other hand is unified, automated and continuous and enables companies to close faster with complete and accurate results. There are so many benefits to modern methods such as: automatically highlighting variances to let team members action them immediately; automated and more accurate reconciliation; better visibility and the ability to group particular accounts so you can visualise relationships between them; streamlined auditing that lets external auditors pull information without needing input from your team.
That all sounds great. But how do you convince the key leaders in your company to make the transition? These five steps should help you get started and then continuously improve to maximise the benefits.
Step 1: Build a convincing business case and benchmark your team’s performance around time-to-close and their time spent in transactional accounting.
A typical modernisation goal is between five to ten days to close the books and assumes 30% to 50% time savings on the most repetitive processes. Be sure to keep track of other more intangible benefits around balance sheet integrity and staff engagement.
Step 2: Start with a quick automation win—and then scale.
Switching all your processes over at once can be a difficult thing to pitch to the leadership team. Better to adopt an agile approach and focus on a quick win on a highly time-consuming yet measurable accounting process. This could be something like bank reconciliations or performing manual journey entries.
But don’t stop with just one. Create a roadmap of individual test cases that you can roll out, ideally with a solution package that is scalable and evolves with the business, so you don’t have to rely on IT teams to add more technology.
Step 3: Begin moving to Continuous Accounting.
Look at which period-end processes can be performed within the month and separate them into smaller tasks. Be sure to schedule them as early as possible, automate and analyse them to keep improving effectiveness.
You might want to think about adding structure and discipline to continuous improvement using techniques like Lean Six Sigma.
Step 4: Streamline accounting collaboration.
Since the pandemic began, teams have increasingly been working remotely at least some of the time. Trying to manage teams and collaborate the same way as we did before 2020 is simply not feasible or productive.
Online task management tools are your saviour here. Replace needless meetings and spreadsheet checklists with a solution where you can orchestrate work, reviews, and approval processes from anywhere. This can be further improved by digitising tasks, documents, paper binders, and checklists to one central place.
Finally, move to a self-service auditing process where external parties can easily pull what they need and, if they need help with an ad-hoc request, your team can still help when required.
Step 5: Build a team to sequence and drive ongoing change.
Now that your team are free from the tedious, time-consuming tasks of traditional accounting they should have more time to help maintain their new, modern systems and make sure you never have to go back.
Give them ownership of their working methods by assigning responsibilities such as sponsors, champions, communicators, enablers, and scorekeepers. You can motivate them further by establishing rewards and recognition for successful process improvement. This simultaneously boosts morale while ensuring you don’t rest on your laurels and constantly iterate.
The Bottom Line
There is now more demand on F&A than ever before, including more compliance and regulatory oversight, more business model changes from digital disruption, and more demand for analytics and business partnering. This means traditional manual accounting is simply not sustainable in the modern business environment.
Now is the time for companies to make the move to modern accounting by unifying their data and processes and automating repetitive work. By automating the rote, repetitive processes that accountants have traditionally been burdened with, resources can be refocused on higher-value, strategic activities that can support the organisation as it grows.
Transforming the way F&A operates may sound daunting, but the right technology can help your organisation realise the greatest value in the shortest amount of time. In these uncertain times, businesses must act now to review their resources and capabilities to make sure they’re equipped for the challenges that lie ahead.
By Cameron John, Regional Vice President EMEA, BlackLine