Processes That Can Transform Your Back Office and Beyond
In the modern business landscape, accounting and finance transformation has emerged as a pivotal strategy fueled by the emphasis on automation, standardization, scale, efficiency and cost reduction. The term “transformation” in today’s world has largely been defined as the optimization of the organization’s use of talent, technology and process. This, in turn, leads to significant improvements in company-wide performance — from increasing accuracy and productivity to reducing the risk of error and non-compliance.
The reasons that organizations may undertake transformative projects can include outgrowing current systems, integrating new processes and technologies following acquisition(s) and divestiture(s), or encountering heightened audit requirements and regulatory scrutiny following an initial public offering (IPO). Many companies find that without the right Enterprise Resource Planning (ERP) system in place, the potential of accounting and finance to scale business operations is hindered, and the inability to scale business operations to meet growth needs exposes them to unnecessary risks.
In conjunction with IT, CFOs and Controllers are primarily tasked as the “owners” of identifying and/or implementing new ERPs and other automation tools across the organization. This group’s ownership of key policies and procedures regarding operations and financial data naturally positions them as owners of the ERP and other key financial systems.
As we outlined in a recent accounting co-sourcing article, these same resources can also face the challenges of talent shortages and time constraints, having to allocate resources to these special projects on top of the day-to-day responsibilities to close the books, prepare monthly budgeting/reporting, and manage audits. As a result, accounting and finance leaders often find themselves taking on projects to optimize their back-office functions with unrealistic or unmeasurable goals, timelines, and budgets. In fact, according to research from Gartner, 55% to 75% of ERP projects either fail or don’t meet their intended objectives.
The first step in a successful ERP selection and implementation or use of other automation tools is thoroughly articulating accounting, finance and other stakeholders’ requirements to meet business needs, challenges, and opportunities. ERP and automation transcend mere technology; they rely on the foundation of the underlying accounting and finance processes. A deep understanding of the company’s chart of accounts, month-/quarter-end close, budgeting, and reporting processes is fundamental to getting the most out of any technical solution that an organization chooses.
A current state gap analysis and/or maturity assessment (ranging from a quick sprint to a multi-week evaluation) is a critical diagnostic to evaluate operational and back-office inefficiencies and risks. For instance, a business that takes 15 days to close the books each month may not understand or overlook the root cause of manual account reconciliations, leading to delays in decision-making and potential audit deficiencies.
Organization-Wide Benefits Through Finance and Accounting Transformation
There should also be a measurable Return on Investments (ROI) after implementation. The benefits of finance and accounting transformation can be considerable — both for the back office and for the organization as a whole.
Operating Efficiencies: By automating certain tasks, companies can reduce the time that staff must spend on labor-intensive manual tasks like order-to-cash and procure-to-pay procedures, as well as financial close. It also frees up team members to focus on more complex, value-add elements of their role, boosting both productivity and job satisfaction.
Enhanced Accuracy: By having a sole source of truth for data, back-office teams can mitigate the risk of duplication, inconsistencies, and delays in their financial reporting and analyses. This improves quality and reduces the likelihood of error.
Standardized Compliance: The standardization of processes and controls using robust processes and secure systems allow the company to mitigate the threat of data breaches, fraud and audit deficiencies while ensuring that the organization complies with industry regulations.
Real-Time Data Access: The right approach helps companies integrate and analyze data from across the business, letting users access that information anytime and anywhere for strategic planning. This holistic, real-time view of performance means leaders can easily spot issues and opportunities and then make more informed decisions about how to address them.
The final aspect of implementation is the ongoing change management and feedback process for continuous improvement. Finance leaders need to assess if their in-house teams are constrained by operational tasks, the structure of their teams, and the effectiveness of their accounting systems and processes by asking themselves the following questions:
- Are your in-house accounting teams constrained with operational tasks that prevent them from executing strategic initiatives?
- What does the structure of your team look like?
- Are you getting the value and results from your accounting system that you need?
- Are your business processes manual, disparate, and often maintained outside of your ERP? Is there a clear process, and if so, are the steps clearly documented?
- Do you lack standardization across finance and accounting that is impacting operations?
- Are you able to generate the reports from your ERP that meet your requirements?
How Cherry Bekaert Can Help
Cherry Bekaert’s Accounting Advisory practice understands that there is no one-size-fits-all approach to transformation for accounting and finance departments. We offer experienced CPAs who have a depth of knowledge in both public accounting and industry roles to create individualized and practical solutions that deliver maximum ROI.
Our team can guide your accounting and finance teams in various areas, such as chart of accounts design, accounting business cycle workflow, current state assessment, gap analysis or future state design of the accounting and finance function, and accounting and finance process maturity assessments (order-to-cash, procure-to-pay, treasury, budgeting, financial reporting and standardization of processes and controls).
Whether you are looking to enhance your processes or unlock the full potential of existing and new technologies, Cherry Bekaert can help make the transition as smooth and seamless as possible for CFOs, Controllers, and their teams. Most importantly, our goal is to implement changes that deliver a lasting impact for the back office and beyond.
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