Part 15 of the Continuous Accounting blog series. You can access the full series here.
Many organizations fear finance transformation projects. Horror stories of failed attempts and the confusion of figuring out exactly where to start leave many quitting before they even begin.
Getting started is often the hardest part, but fortunately, Continuous Accounting is a journey — not an all or nothing proposition.
The best performing finance teams embrace this journey, creating a culture of continuous improvement that benefits the entire organization. They set goals in the areas of technology, process, and people, and are always adapting, innovating, and improving in order to meet them.
This maturity model will help you identify your current state, and provide milestones for you to work toward as you begin building the future of your organization.
Level 1: Legacy Processes
Technology has revolutionized the modern business world, but the record-to-report process has remained unchanged since the days of Lotus Notes and 18in paper. ERP systems and spreadsheets are still the only traditional tools available to today’s accounting and finance professionals.
While this is accepted by many as “the way it’s always been done,” it results in a time-consuming, inefficient process that is fraught with risk.
Talented accountants spend most of their time performing rote tasks that take them away from value-adding activities — like the enhanced analysis and strategy that drew them to this profession in the first place.
Level 2: Modernized Record-to-Report
The Continuous Accounting model utilizes individualized tools and integration to automate the record-to-report process. The key to success is a combination of technology, process, and people.
A strong leader with a vision and mandate for change is needed to lead the investment in purpose-built technology. This can alleviate the comment internal resistance to change, which stems from a distrust of technology or simply not wanting to depart from the familiarity of current processes.
A strong leader with the vision and mandate for transformation evaluates and implements individual tools to begin automating and streamlining the existing record-to-report process.
Level 3: Continuous Processing
Cutting edge, best-in-breed software provides extensive automation and support for complexity and volume. With this in place, the financial close is effectively managed, issues are identified as they occur, and analysis can be performed throughout the month.
All of the concerns that Controllers previously had about overtime, incomplete work, errors, and not completing the close on time are eliminated. Front-line managers and senior accountants have broad autonomy to balance workloads and make decisions.
The road to this point of the process is paved with questioning conventional wisdom, challenging organizational inertia, and rebuilding the R2R process with an emphasis on real-time processing.
Level 4: Strategic Accounting
People are at the heart of innovation at every company, and there is undeniable value in developing exceptional accountants. This means empowering your people to make decisions, expand their strategic and analytical abilities, and maximize their skillsets.
When staff accountants are granted broad autonomy to regulate their own workload and to identify, remediate, and resolve issues, they will work collaboratively with limited oversight.
With the right tools in place, the financial close becomes a non-event, rendered trivial by a combination of technology and process redesign. The Accounting organization shifts its focus to driving value for the business, proactively identifying issues, and partnering with other teams.
Level 5: Continuous Improvement
All of this leads to an organization that is truly data-driven. Work is broken down into smaller and smaller segments, more automation is brought into play, and reconciled and validated actuals are produced with virtually no added work.
Accounting & Finance are constantly looking for new ways to use technology, while real-time data and metrics are utilized to benchmark success, coach your professionals, and continually identify little ways to improve.
These small changes add up and lead to a daily increase in efficiency and effectiveness, encouraging a company-wide culture of continuous improvement. Continuous Accounting puts you ahead of the curve, and continuous improvement is your investment into staying there.
Read the Blueprint for Continuous Accounting ebook to learn more about how to build the future of your organization with this progressive approach.