Part 17 of the Continuous Accounting blog series. You can access the full series here.
Continuous Accounting works most effectively when it’s implemented and practiced based on three key principles. Organizations that use this approach to increase accuracy, improve efficiency, and become more strategic commit to:
- Using technology to distribute departmental workloads continuously across accounting periods
- Supporting continuous, end-to-end process management to enhance efficiency and increase data integrity
- Adopting a continuous improvement approach to overcome inertia and the “we’ve always done it this way” mindset to which finance staffs are particularly prone
Transform Your Technology
End-to-end process automation is critical for keeping pace with change and elevating the strategic role of finance. The results of upgrading business performance through automation are substantial. To that end, Continuous Accounting uses a number of automation pieces to support the creation of useful information at the speed of business.
Using technology to automate procedures enhances the benefits of process optimization while increasing the overall productivity of accounting team members. And by investigating the technology landscape while reviewing process, organizational leaders can open their eyes to previously unimagined possibilities.
Yet “transforming technology” includes more than just automating manual processes. An effective Continuous Accounting practice also requires the use of streamlined workflows, comprehensive task assignment and monitoring, robust reporting tools, and enhanced data analysis capabilities.
While automating previously rote and repetitive tasks is key to improving accuracy and efficiency, it’s only one component of building the strategic finance organization. Ensuring data is available when it’s needed, in real time, and increasing the use of analytics—both predictive and prescriptive—depends on an integrated systems approach.
Organizations that integrate an ERP with a dedicated financial transformation platform not only gain the advantage of automation but enable exceptional accountants as well.
Unleash Your People
There appears to be widespread agreement that accounting and finance teams have the necessary skillsets to drive business strategy, but these skills are underutilized. To unlock this value, companies need to automate, centralize, and standardize the tedious and manual accounting work that consumes so much of accountants’ time and effort.
When manual processes are streamlined, accounting and finance teams spend fewer hours on transactional activities. The focus shifts to analyzing the data and reports and addressing only the exceptions.
Freeing employees to do more analytical work via a Continuous Accounting practice delivers more than broad organizational benefits. When accountants get to do what they’re best at doing and the close is no longer a 10-day frenzy, there’s a positive emotional effect.
Transitioning to accounting strategist roles can nurture employee motivation and engagement, which in turn improves productivity and retention. According to Gallup surveys, organizations with “highly engaged business units” see a 17% increase in productivity, a 21% increase in profitability, and between 24% to 59% less turnover.[i]
Streamline Your Process
Left unchecked, manual processes, together with expanding data volumes, are preventing Finance from making the shift from back-office accountant to strategic business partner. Rote, human-driven, and error-prone manual procedures expose companies to the undue risk of inaccuracy, or worse, restatement.
The essential first step to process improvement is to identify the bottlenecks, which typically stem from highly manual procedures. Processes need to be evaluated by not only how to automate them and make them faster, but why they exist and how they might be done differently.
The origin of many accounting processes started with limitations in technology. The two phrases we hear over and over again are “we run allocations once a month because it takes 18 (or more) hours for the program to run” and “the close requires 10 full days because we need that much time to match transactions and aggregate data for reporting.”
But what if you could run those allocations in real time? What if transactions were matched in minutes instead of days? What if you could understand the full cost to serve a customer daily instead of monthly? What decisions could you make that would enable you to better serve that customer proactively instead of waiting a month? What if you had the time to run potential what-if scenarios to help enable better decisions?
Looking at opportunities to add automation into your accounting processes will open up a myriad of ways to drive value for customers and vendors and improve the employee’s work-life balance by removing the non-value-added jobs from their to-do lists.
Read The Blueprint for Continuous Accounting for a deeper dive into how you can successfully implement this approach at your organization.