The office of the CAO has become a busy place.
Chief Accounting Officers, whose normal responsibilities include overseeing the financial close and internal control environment, are now being challenged like never before due to disruption caused by the COVID-19 pandemic.
As KPMG notes, “The CAO sits at the center of the economic storm that is buffeting many companies. CAOs are helping their organizations work through falling revenue, liquidity issues, layoffs, and various cost-saving scenarios.”
“This gives CAOs an opportunity to play a key role in guiding companies through ongoing financial challenges, even as the disruption creates additional responsibilities in their ‘day job’—such as closing the books and managing internal controls over financial reporting in a virtual environment.”
Room for Growth
Even before COVID, the CAO’s role was expanding, notes Katherine Becraft, a financial close expert at BlackLine.
“CAOs are being entrusted with critical projects and working as strategic partners to the business,” she says. “They’ve been increasingly involved in activities such as enterprise risk management, mergers and acquisitions, and other business transformation projects.”
“Now, at a time when a major economic disruption has created new financial and control risks, their focus has been shifted away from their compliance responsibilities.”
Start at the Beginning
There’s no simple answer to such a complex array of challenges and opportunities, but Becraft does offer some advice: “CAOs should start at the beginning, at what KPMG refers to as their day job, to look for opportunities to create capacity within their organization.”
Putting technology to use in bread-and-butter accounting processes—in financial closings and controls and compliance—will help free up capacity for the CAO to take on added responsibilities.
“A necessary first step is to advance the accounting function by embracing technology that can help expedite the most important accounting functions,” she says. “That’s what cloud-based process automation does—it addresses the middle of the record-to-report process, replacing manual spreadsheets, validations, and controls with automation.”
“It integrates key accounting processes with a single, unified store of data, adds automated workflows and control points throughout, and makes processes visible to authorized users. Process automation also has mechanisms to support continuous improvement, so the accounting function becomes even more efficient over time.”
Adding Reliability & Reducing Risk
Applying automation efficiencies to Accounting will help the organization bring reliability to its financial forecasts and reduce the risks of financial misstatements. And, Becraft notes, it will help free up the CAO’s time to bring accounting knowledge to other aspects of a company’s operations.
KPMG agrees and offers some optimism: “By taking on new responsibility through these extraordinary times and adapting quickly to the new reality, CAOs are helping position their companies to survive and grow when the economy recovers.”
Read our latest issue of BlackLine Quarterly for more stories like this that can help you move through the current disruption and into a more productive future.