This article originally appeared in FEI Canada. It’s an 8-minute read.
Manual accounting processes are one of the top frustrations of every
Today’s crisis has upended accounting processes, putting a spotlight on trust.
Remote work has disrupted financial close processes that have been the same for years. Manual accounting has always been risky, and now it is unsustainable.
Yet, the demand for data is faster and more frequent than before, given the economic uncertainty, putting further pressure on already stretched reporting processes. And accounting staff are concerned about what the future holds.
Trust in the financials, and fostering trust at every level of the finance organization, has never been more important.
Eighteen months ago, long before the current disruption, an independent study of 1,100 C-level executives and finance professionals revealed how much they trusted the financials. Over half (55%) of respondents said they were not entirely confident they could identify financial errors before reporting results. And nearly 70% confessed their organization had made a significant business decision based on inaccurate data.
Today’s environment has added additional complexity. With Finance and Accounting now working from home, many are struggling with manual accounting, spreadsheets, desktop tools, and working around paper-based processes that were hard enough to accomplish in the office.
Getting everyone on the same page with financial close checklists on spreadsheets over a web conference creates more room for a vital preparation task, review, or approval to fall through the cracks.
The business is relying on Accounting more than ever for timely data. Accounting is on the hook to identify the impact of this crisis on the balance sheet as early as possible. They are being looked to by FP&A teams who are updating rolling forecasts and models more frequently, and business unit and line of business heads who must clearly understand the P&L impact. It’s creating friction within and across teams.
There are simple proven ways to boost trust at every level. Based on learnings from the BlackLine community of over 260,000 accountants, we’ve compiled the seven most frequent.
Eliminate Labor-Intensive, Error-Prone Manual Processes
It’s no surprise that manual accounting tasks are simply more error-prone. The Censuswide study found that of the finance leaders who did not trust the accuracy of their financial data, manual inputting leading to human error topped the list of reasons for 41% of respondents, and 28% blamed reliance on clunky spreadsheets.
Modernizing accounting by ensuring tasks like close checklists, reconciliations, journal entries, and intercompany processes are as automated as possible can ensure consistency and standardization that is a critical trust booster.
Enable Accountants to Do Their Best Work
Errors happen when employees are checked out and burnt out from performing repetitive journal entries or manual bank, credit card, POS, or other reconciliations.
Automating transactional accounting throughout the period cuts the overtime during the close and other high-intensity accounting periods. It can increase employee engagement by enabling accounting professionals to spend more on higher-value analytical work and boost both confidence and accuracy.
Evolve Beyond SALY, “Same as Last Year”
Practicing same as last year simply won’t cut it in this rapidly evolving, remote business environment.
Whether your company is launching a new digital storefront, changing to a subscription model, moving to omnichannel, or simply faced with new regulatory reporting requirements like the lease accounting rules, accounting processes must change and adjust in a scalable way.
Old spreadsheet-based processes that worked last year may not be scalable this year, without things breaking and damaging accounting’s credibility.
Drive Change Management, Not Just Change Leadership
Successful change management initiatives do not happen by chance. Put a change management process in place, and someone that can own driving it who is tasked with tackling at-risk, repetitive, and error-prone period-end tasks. Assign a Sponsor, ideally a senior finance leader to communicate, incentivize, and monitor change.
Identify a Champion who can work with everyone—from accounting managers or supervisors to the Controller. The role of your Champion is to identify process improvements and find ways to apply technology like financial close automation to make the process better―or reinvent it altogether.
And finally, designate Communicators, Enablers, and Scorekeepers who can ensure that change sticks, and the organization is continuously and measurably modernizing.
You can learn more about these five essential roles here.
Define “Value-Added Activities”
While automation is critical to ensure trust in data and process, it is also important to provide a clear roadmap for accounting staff to understand how their roles will change. Accountants need to be able to trust how these changes will benefit them in areas like reduced overtime, less risk, opportunities to learn new skills, or more satisfying work.
Leadership must clearly explain what it means for A&F to move from a back-office function to a “strategic business partner,” and how jobs and roles will shift for the better.
Invest in Your People
Offer continuous learning opportunities, career development, and continuous upskilling to increase engagement and trust, and ensure your organization can take on new challenges and innovate. Whether changing roles, technology, or processes, it is vital that no talent is left behind.
An ideal approach is to deploy an online “university” as a go-to for tracking the adoption of new finance and accounting technology to manage learning and development activities.
Foster a Stronger Relationship Between Accounting & Finance
Despite functioning under the same umbrella, Accounting and Finance do not always have a solid business relationship.
Accounting’s trust in Finance is damaged when the demand for the numbers is unreasonable and requires extensive overtime to provide. And Finance cannot trust Accounting when those numbers are not fully baked.
There are numerous ways to improve this relationship. Automation can help cut cycle times and improve accuracy. Providing more transparency can help too, using task management solutions that can provide a clear perspective on where everyone is in their respective processes, rather than each team acting as a silo.
Finally, securely centralizing critical information that is often buried in spreadsheets or documents—like checklists and data extracts—into a single web-based store can reduce the “tribal knowledge” and increase overall collaboration.
The amount of change hitting enterprises and accounting departments at once is dizzying—from fluid business conditions that demand near real-time data, to disruptions around how everyone has traditionally worked.
Building trust at every level is more critical than ever. Read this white paper to dive deeper into these seven ways to increase trust in Accounting from top to bottom.