recently released Investigation montvale base Institute of Management Accountants When Deloitte Management Center We found that 95% of finance and accounting professionals admit that their organization’s management function “has more to do or not far enough” to prepare for the future of accounting and finance. rice field. Cons: Lack of real-time reporting and insights, financial close process improvements, manual redesign and automation. NJBIZ spoke with some experts to figure out what was going on.
Bible
“I’ve seen this movie before,” I said. Eisner Amper Chief Risk Officer Peter Bible. “As technology advances, many CFOs and other internal accountants find themselves caught up in the catch-up due to funding constraints.”
Large publicly traded companies “with market caps in the billions of dollars” are often under pressure from regulators and shareholders to close their accounts early and delve deeper into their business analysis, he noted. . “But for smaller private companies, financial resources often need to be allocated to business operations first. After that, finance and accounting can be leftovers.”
However, that doesn’t completely solve the problem. “Creditors want up-to-date financial information from commercial borrowers,” says the Bible. “The pressure is not so great for smaller businesses, but at some point lenders will start stepping up their demands.”
Meanwhile, companies like EisnerAmper are playing their part. “Executives often work in an isolated world and don’t always know what’s going on in the outside industry, but we can give them that perspective.”
According to Ethan Brysgel, “These types of problems span a wide range of industries and business sizes, from startups to large corporations. Markham LLPis a leader in national financial accounting and advisory services. “Business owners and other stakeholders, including shareholders, regulators and bankers, want faster closings and more analytical reporting, but many companies, especially smaller ones, We are facing financial and human resource constraints.”
Accounting and advisory firms like Marcum “can provide outsourced support and expertise,” he said. “So instead of trying to keep employees with higher salaries and benefits, companies can call us and others as needed.”
for those who are confused
matatov
“Organizations of all sizes and stages are experiencing rapid change across functions, including finance and accounting. PKF O’Connor Davis“One of the key responsibilities of the finance team is to produce quick, actionable organizational information to improve decision-making and drive value. Whether it’s a reporting package or a 13-week rolling cash flow forecast installed to keep an eye on startup liquidity, your team can own or rapidly develop this critical capability .”
Allocation and management of capital are also important, he added. “To allocate capital, you and your team need the skills to create and track budgets and periodic reforecasts, often along with entering non-financial data, and working with other department heads. Control maturity can escalate depending on the risk profile and complexity of an organization, and the need for effective controls and the costs and costs of implementing, monitoring, and evolving such controls. Care must be taken to balance the
To accomplish this, “Consider arranging a team to design, provide, or facilitate oversight of key systems. ,” explains Matatov. “You can often start with a spreadsheet checklist and a simple single-page policy for your core processes and evolve as needed.”
Chimura
More and more companies are turning to outsourcing services as a way to “keep their processes and procedures up to date,” said Nina Chmura. Wism Partner and market leader in outsourced accounting systems and services. “Especially small businesses, they may be used to the way they do things, but they may not update as often as they should. But as you grow, you may need to add controls and technology to accommodate your company’s expansion.”
Unfortunately, she added: Property, plant and equipment or research and development may have available funding, but management may not be aware that investments are also required to keep accounting and financial systems up to date . If a mechanic used his 20-year-old equipment to work on a current vehicle, they wouldn’t work very well. The functions of accounting and finance are the same. Technology means you can do more with less, but first you have to put the system in place, run it and test it. ”
What does it take to make a business owner smarter? “It often happens when a significant other leaves the company,” says Chmura. “Suddenly, the owner realized that there was a huge gap that could not be filled.”
Dont return
According to Al Traverso, partner in manufacturing and distribution and non-profit activities at Sax LLP, the COVID pandemic and the need for many people to work remotely has pushed the timeline for companies to digitally update their accounting and financial approaches. accelerated. . – pixels
The COVID pandemic and the need for many people to work remotely has accelerated the timeline for companies to digitally update their accounting and financial approaches, according to Al Traverso, partner in manufacturing and distribution and nonprofit activities at . did. Sachs LLPWhile COVID may be less of a threat now, the digital transformation of accounting and finance is “not set back,” he said. “Companies need quick access to reliable information, and stakeholders want more automation. will be able to spend more time on value-adding activities.”
“Traditional monthly closing is outdated,” says Traverso. “Right now, we need a daily, or at least a weekly ‘break-in’ report so the CFO can track his KPIs. [key performance indicators] Find trends quickly. For example, some software packages can flag material costs and other changes that exceed a set percentage. ”
However, the transition can be difficult for growing companies. “Maybe they started with a decent but basic accounting software package like QuickBooks,” he said. “Then, as the company started to grow, more bolt-ons were added for inventory, material sourcing, etc. But at some point the expansion of the business needed something bigger, so we moved to the next level. Are administrators accustomed to basic accounting packages motivated to invest human and financial resources to implement new packages?”
Sachs experts can help clients make the transition, he added. You can help them balance their financial and other resources by focusing on the mission-critical areas that need to be addressed, and finally, design and implement processes using new software packages. “Today, it’s all about having timely and reliable information – and that time frame is getting shorter and shorter.”
there is no escape
According to the joint statement, “All businesses, regardless of size, must be open to adopting new technologies to improve their controller capabilities to compete in today’s data-driven world. ” Wilking Gutten Plan Principal Brian Saffras and Daniel Fiorentino. “Large businesses may have more resources at their disposal, so they may be ahead of the curve compared to smaller businesses, but all sizes need to address these issues.”
In addition to faster closing and other updates, companies will need to “re-evaluate their existing headcount in the controllership area to ensure they are properly staffed to move the controllership function forward quickly, so they will be able to compete with their competitors.” never lags behind.”
Also, not only departments but also systems need to communicate. “Companies need more integration across their various software systems,” they advised. “The more we can integrate these systems, the faster the process and the more meaningful insights that lead to actionable items.
“Our company recognizes that many companies, including our own clients, struggle in these areas, so we help them navigate these challenges. For clients who want to solve problems with their own staff, we help them with the hiring process, interviews and candidate evaluations to ensure they have the right employees in the right places.”
Cost is often the biggest obstacle to change, but they warn: Fewer accountants are being hired each year, creating the challenge of building the best team. ”
