This is Part 2 of an article that originally appeared in Strategic Finance Magazine.
Traditional manual accounting processes are not sustainable—and as many F&A teams began working remotely at the beginning of March, this became even clearer.
Closing virtually and performing remote audits are significantly more challenging when dependent on manual processes. The companies that had the right finance automation solutions in place have been closing virtually with confidence since the pandemic began.
But it’s not too late for you and your teams to make the move to modern accounting, and it’s becoming increasingly important as we continue living and working in a far more virtual world.
Here are two powerful ways modern accounting can transform your F&A organization as we all continue to adjust to working and closing virtually. Together, they can help enable a virtual close from whenever you’re working and attract top talent instead of becoming responsible for burnout.
The Power of Continuous Accounting
One area where many companies are effectively applying finance automation is period-end accounting. As automation is implemented to accelerate financial close processes, companies can effectively move toward a Continuous Accounting model where automation, control, and period-end tasks are embedded within day-to-day activities.
This more closely aligns the rigid accounting calendar with the broader business, and frees skilled accountants to spend more time on research and analysis, driving value for the entire business. This combination of process change and technology adoption results in a more efficient virtual close, more timely and accurate financial data, and a more effective organization.
One large casino applied this approach to their accounting operations and experienced immediate and quantifiable benefits. This company had already implemented process changes, reviewing the transactions of each point-of-sale (POS) system for its food and beverage outlets across more than 30 properties every day.
This meant checking and updating more than 1,000 unique spreadsheets and manually ensuring that every item is accounted for and properly connected to other related items. While the company was already making this process part of its daily workflow, which is a key component of Continuous Accounting, the work still required an inordinate amount of costly, manual intervention.
Worse, all those results had to be reviewed and the accounts had to be reconciled at the end of the month, which required poring over more than 30,000 spreadsheet cells during the close.
This critical but labor-intensive process sent the company searching for a better way. It implemented software that automated the matching of transactions from every POS system, so only exceptions (or unmatched transactions) were the focus of the daily routine.
Correcting entries could then be made in near real time. As a result, the company can reconcile these high-volume accounts every day. This continuous and automated process not only ensures accurate daily balances that can be used for analysis and business decision support, but also streamlines the reconciliation of these accounts at month-end.
Taking these steps represents a fundamental shift in the way Accounting and Finance operate. When rote tasks are eliminated with automated processing, accounting and finance can become proactive rather than reactive, and accurate information can be delivered in real time.
This frees skilled accountants to move their focus from mundane transactional tasks to analysis of the bigger picture, which drives value for the entire business. It unleashes them to be exceptional.
The Power of the Exceptional Accountant
By employing Continuous Accounting practices, everyday accountants can become Exceptional Accountants, providing high-value services in areas like fraud detection, compliance, data analytics, technology strategy, and business advice.
When the casino automated its manual accounting processes, its accounting and finance team spent fewer hours manually searching for errors, fixed exceptions quickly when they were identified, and saved time by eliminating the need to manually transfer data across disparate systems.
Internal controls built into the casino’s software enhanced visibility, improved accuracy, and delivered superior results in far less time.
With this workflow in place, accountants could shift their focus to analyzing the data and reports to find issues or identify business trends, benchmarking productivity outcomes, and continually honing internal processes.
Accounts that are identified as being of particular importance are monitored throughout the month—and on a daily basis, if needed. This means there’s more time to react to items needing further investigation, an end to rushed period-end reviews, and increased emphasis on the analysis of results for changing business trends.
Exceptional Accountants are a company’s experts in its business. Their knowledge and expertise give them the instincts to quickly discern mistakes, compliance issues, and evidence of fraud. Having time for analysis enables them to identify shifting market conditions that impact the bottom line.
As they embrace automation, they begin to create an environment of continuous improvement and forward-looking thinking that finance teams need in order to stay engaged and deliver full value.
Read our 7 Habits of Highly Exceptional Accountants ebook to learn how to thrive in this season of continual change.