As the world enters a period of heightened economic uncertainty, rising inflation and vulnerability to market fluctuations mean that many companies are now reassessing their strategies and looking for ways to optimize their operations internally. In this context, leaders need to be sure that they are making the right financial decisions for the organization. This is why optimizing finance and accounting (F&A) should be at the top of every organization’s agenda. Especially for mid-sized businesses that need to stay competitive and grow with confidence.
Ideally, before deciding on any business strategy, a business would have access to up-to-date financial data that can help inform its next decision. Agile companies that can be proactive and/or react immediately tend to do better than those that are delayed in their decision-making. However, for companies that are still struggling with decades-old accounting processes, this is simply not possible.
Sure, you can go back to last month’s numbers and make an educated guess, but educated guesses aren’t enough. You don’t need to know where the organization was in the past. You need to know where he is right now. Real-time visibility helps spot issues as they arise and resolve them before they develop.
Traditional accounting tools don’t just let you fly blind. They are also time-consuming and labor-intensive, and most importantly, they prevent you from showing your true professional worth. The best M&A teams are increasingly positioning themselves as a key strategic partner, only able to analyze business performance and then provide recommendations based on that data. But that’s just not possible if you’re constantly bogged down in Excel spreadsheets.
Modern accounting, on the other hand, is unified, automated and continuous and allows businesses to close faster with complete and accurate results. Modern methods have many advantages, such as: automatic highlighting of deviations to allow team members to apply them immediately; automated and more accurate reconciliation; better visibility and the possibility of grouping specific accounts in order to visualize the relationships between them; Streamlined auditing that allows external auditors to extract insights without requiring your team’s intervention.
It all sounds good. But how do you convince your company’s key leaders to make the switch? These five steps should get you started and then continually improve to maximize the benefits.
Step 1: Build a compelling business case and compare your team’s performance in terms of time to close and time spent on transactional accounting.
A typical modernization goal is five to ten days to close the books and assumes a 30-50% time saving on the most repetitive processes. Be sure to keep track of other more intangible benefits around balance sheet integrity and employee engagement.
Step 2: Start with a quick automation win, then scale.
Switching all your processes at once can be a difficult thing to present to the management team. Better to adopt an agile approach and focus on a quick win on a very time-consuming but measurable accounting process. These can be bank reconciliations or manual trip entries.
But don’t stop at just one. Create a roadmap of individual test cases that you can deploy, ideally with a scalable solution package that grows with the business, so you don’t have to rely on IT teams to add more technology.
Step 3: Start moving to continuous accounting.
Look at which end-of-period processes can be run during the month and separate them into smaller tasks. Be sure to schedule them as soon as possible, automate them, and analyze them to keep improving their efficiency.
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 start of the pandemic, teams are increasingly working remotely, at least part of the time. Trying to manage teams and collaborate the way they did before 2020 just isn’t feasible or productive.
Online task management tools are your savior here. Replace unnecessary meetings and spreadsheet checklists with a solution where you can orchestrate work, reviews, and approval processes from anywhere. This can be further enhanced by digitizing tasks, documents, paper binders and checklists into one central place.
Finally, transition to a self-service audit process where external parties can easily pull out what they need and, if they need help with an ad hoc request, your team can always help when needed.
Step 5: Assemble a team to sequence and drive continuous change.
Now that your team is freed from the tedious and time-consuming tasks of traditional accounting, they should have more time to help maintain their new, modern systems and ensure you never have to go back.
Give them ownership of their ways of working by assigning them responsibilities such as sponsors, champions, communicators, facilitators and markers. You can further motivate them 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.
There is now more demand on M&A than ever before, including more compliance and regulatory oversight, more business model changes due to digital disruption, and more demand for analytics and business partnering. This means that traditional manual accounting is simply not viable in the modern business environment.
Now is the time for businesses to transition to modern accounting by unifying their data and processes and automating repetitive work. By automating routine and repetitive processes that traditionally burden accountants, resources can be refocused on higher value-added, strategic activities that can support the organization as it grows.
Transforming the way M&A works can seem daunting, but the right technology can help your organization realize the greatest value in the least amount of time. In these uncertain times, businesses must act now to review their resources and capabilities to ensure they are equipped to meet the challenges ahead.
By Cameron John, Regional Vice President EMEA, BlackLine