The Winning Blueprint
For an Efficient & Effective Finance & Accounting Team
From preventing the misuse of company assets, to increasing production and profit, accounting is the tool that makes effective business management possible. The backbone of any business, accounting guides today’s business leaders to make their most crucial decisions. And the more complete and accessible the data a business has, the more forward-thinking executive leadership can be. Check OUT THE WINNING BLUEPRINT FOR AN EFFICIENT & EFFECTIVE FINANCE AND ACCOUNTING TEAM BELOW
The Winning Blueprint for an Efficient Finance and Accounting Team
Many middle-market businesses still view accounting as a cost to be supported by business activities rather than an asset that can actively help those activities succeed. This key difference between those businesses that have turned their F&A function into a competitive differentiator versus others that are struggling is the ability to use accounting to drive business results, rather than just report them.
This winning F&A blueprint paper will describe the benefits of next-generation accounting and offer simple, scalable methods to implement efficient finance processes at every level of the organization.
Moving Toward Next-Generation Finance & Accounting Team Effectiveness & Efficiency
It is easy to understand why businesses today struggle with building best-in-class accounting practices.
Many CFOs face the same debilitating issues, be it limited resources, disparate systems or scarce talent. And in fact, while the CFO is expected to play a more strategic role in the C-suite, technology, and globalization are adding layers of complexity—as well as overwhelming opportunity—to the corporate finance function.
Many organizations are still struggling with chaotic month-end closings, late reports and backward-thinking analysis which put undue stress on hard-to-attract F&A employees.
Until very recently, many businesses could not afford the tools and technology necessary to gain the advantages of a streamlined accounting approach. And CFOs often have their hands full just trying to get accurate reports ready on time.
So how does a CFO get from where they are today to what will be required tomorrow? How do they move the financial function along the capability continuum in order to not only keep up with their high performing competitors but possibly leap-frog them into the future?
Transitioning toward a best-in-class & efficient finance and accounting team means finding ways to leverage talent and technology effectively. With the right system in place, businesses can anticipate the impacts of business changes and make better growth-oriented decisions that allow the organization to flourish.
Breaking Down Accounting and Finance Components
The key to revolutionizing the way your accounting team operates is understanding the two fundamental categories of processes within the accounting function—judgment-based processes and transactional processes.
Judgment-based processes involve making important financial decisions that require deep knowledge of company policy and years of experience. High-impact, judgment-based processes include reporting taxes, producing management reports and conducting internal audits.
Transactional processes are repeatable, low-impact processes that inform judgment-based processes but do not add value on their own. General accounting, accounts payable and accounts receivable are all transactional processes.
Most organizations undergoing growth find themselves quickly overwhelmed by the number of transactions they need to complete, and consequently put less priority on judgment-based processes. This leads to a situation where a lack of current data requires executives to make key decisions based on historical figures.
An IBM study found that 87 percent of CFOs agree that planning, forecasting, and budgeting optimization is important, but only 45 percent believe they are doing it effectively.
This can often be attributed to an accounting department that is buried by transactional accounting processes at the expense of being able to focus on valuable judgment-based processes.
Transactional processes are important but because they do not add value, CFOs have an urgent incentive to minimize the amount of time their team spends on them. Doing so requires an understanding of what defines a successful accounting team and how it can be organized for maximum effectiveness and efficiency.
How Does a Successful and Efficient Finance and Accounting Team Add Value?
There is more to an effective finance and accounting team than generating accurate annual reports. In fact, reports are only a by-product of best-in-class accounting – not the main goal. A modern, robust accounting team appropriates resources effectively to meet the following needs:
- Driving business results instead of simply reporting them
- Aligning talent and resources to meet strategic company goals
- Informing key decision-makers with the most recent data available
- Consolidating and analyzing data to generate actionable insights
- Setting benchmarks and monitoring progress for long-term growth
- Using modern technology to standardize and automate transactional processes
- Attracting and retaining top talent
In today’s hyper-reactive business landscape, making critical decisions using data from reports generated several months ago is extremely risky. The world is moving faster than ever before and your accounting team needs to be prepared to meet new challenges.
Achieving best-in-class accounting adds value to business processes in profound ways. A top accounting team can deliver higher-value services at about half the cost of their average peer by redeploying finance talent, transforming accounting delivery models and leveraging technology to optimize efficiencies.
With world-class accounting, customers appreciate better service stemming from faster, more accurate billing. At the same time, partners and vendors appreciate a more efficient collection of receivables and disbursement of payables, and the company becomes a trusted and valuable partner.
One of the keys to achieving these goals is through the implementation of rolling forecasts instead of the traditional annual report budgeting process. Annual budgets, created once at the beginning of each year, are almost instantly outdated.
These historical, backward-facing documents result in decision-makers using irrelevant data to make crucial decisions, whereas rolling forecasts are progressive, forward-facing documents that offer a deep and insightful look into meaningful business trends using current, valid figures.
Annual Budgeting vs. Rolling Forecasts
Modern accounting technology makes the integration and consolidation of disparate systems possible, at a price accessible to all.
Automation and cloud-based accounting platforms can both help a business achieve best-in-class status and offer a simplified solution to the traditional accounting grind. Automation reduces time spent on low-impact transactional processes and frees up talent to address value-added, judgment-focused strategy.
Cloud-based ERPs can be implemented relatively quickly and at a fraction of the cost of on-premise ERPs, allowing systems to be consolidated and data accessed on a real-time schedule. A cloud solution is flexible and scalable and allows users to pay for only what they need.
The benefits these technologies offer amplify greatly when implemented in an acquisition environment. Far too often, companies undergoing acquisition simply bolt additional processes onto their existing frameworks without attempting to consolidate them. Automation and cloud server infrastructure make post-acquisition operation a smoother and more streamlined experience.
Winning Blueprint Principle: In-house vs. Outsourced Talent
While the benefits that modern accounting technology offers are clear, businesses looking for best-in-class accounting performance often struggle to implement these benefits without hiring additional talent.
However, it is no secret that finding quality accounting talent is extraordinarily difficult in today’s hiring environment. In 2015, 90 percent of CFOs reported difficulty finding qualified talent for accounting positions.
For all but the largest and most prestigious firms, this obstacle is the one most likely to shatter expectations of creating a best-in-class accounting team that will give your business an edge over the competition.
This situation makes outsourcing an attractive option. Instead of risking resources on talent in a field with a turnover rate of between 15 and 20 percent, organizations can outsource their accounting to established service providers – a manageable, scalable solution that takes much of the stress and uncertainty out of accounting.
Many organizations are hesitant to outsource finance and accounting talent because they believe their books are so complex and so unique that only the existing team can take care of them properly.
Business owners also tend to react to accounting management changes with distrust – but adopting accounting changes in small, incremental steps makes improvement easy.
This can be achieved by partnering with a service provider that is willing to move at your pace, perhaps starting with only the simplest of transactional processes until success is proven.
Outsourcing lets businesses leverage the expertise and resources of a dedicated finance and accounting service provider to achieve the same results large enterprises can.
Instead of dedicating in-house resources to procuring and implementing new technology, organizations simply empower a third-party vendor for whom investing in efficiency-boosting technology is a top priority and constant need.
Implementing these types of changes in-house is difficult, and puts a great deal of strain on management. Investing huge amounts of capital in research and development for accounting technology distracts attention from core business objectives.
The key to achieving best-in-class accounting for your organization is using outsourced labor to perform low-impact transactional processes and support your retained talent for business-critical, judgment-based process work. Outsourcing firms have better access to top-notch talent worldwide and are able to match qualified applicants to the specific needs of your business.
Let Personiv Take Your Finance and Accounting Model to the Next Level
As a provider of customizable outsourcing services with more than 35 years of experience, Personiv has the expertise to provide you with best-in-class accounting and finance services at up to 60% savings.
Our flexible solution allows you to continue using your current accounting platform, or we can utilize our partnership with NetSuite, the No. 1 cloud-based ERP, to consolidate your disparate systems and gain access to real-time reporting capabilities, allowing us to provide valuable insights to enhance your overall business.
We leverage relationships with highly selective global recruitment firms to build unique teams for our clients.
And with a dedicated program manager in Austin, Texas managing the team on your behalf, you can enjoy best-in-class accounting with perfect scalability and constant access to white-glove customer service every step of the way, while achieving your accounting and finance goals.
Contact Personiv and find out how your company can leverage outsourcing to achieve best-in-class accounting for your industry. Visit Personiv.com for more information. Download the winning blueprint file below
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