5 Ways Accounting Transformation Can Help Your Business Achieve More
Accounting and finance leaders face increasing pressure to deliver fast reporting, manage risks, and provide strategic insight with less time and resources. However, many organizations still rely on outdated and inefficient accounting processes and technology with limited capabilities that hinder their growth and performance. How can accounting transformation help them overcome these challenges and achieve more?
The goal of transforming and modernizing your accounting function is to align it with the company’s strategy and meet its future business needs. Here are the five ways accounting transformation can help your business grow and succeed.
1. Provide Strategic Insight
Accounting transformation projects aim to improve the quality of inputs, streamline a process, and ultimately result in a process with Key Performance Indicators (KPIs) and other valuable outputs. Traditionally, the accounting function is left to focus on the financial close, reporting, and audits. However, transforming or maturing your accounting function will allow your accounting function to provide valuable insights and scalability. These results can be achieved through customized dashboards and trackers, documented policies, processes, and user guides, or automation and software.
2. Report Quickly & Receive Rapid Results
Time spent on non-value-added but necessary tasks is time that could be spent on creating forward-focused insights or other value-added tasks. Using month-end close optimization software, such as Blackline, can lead to a 55% reduction in the number of employees involved in reconciliation and up to a 60% reduction in close time. These software solutions support activities not commonly managed by ERPs but critical to business stakeholders and their performance analytics, planning, and decision processes. A software solution, like Blackline, fits directly in the middle of the record to report process and is a complimentary solution in any environment, picking up where systems typically leave the accounting team to complete the work in a manual manner, such as with spreadsheets including reconciliations, close checklists, high volume ticking/tying, and journal entries.
Additionally, automation platforms, such as Alteryx, can be used to automate processes and provide actionable business insights through automated workflows. This software assists with the collection, preparation, and blending of data. It can be used with reconciliation assistance, reformatting legacy system reports, creating industry related reports, providing financial KPIs and metrics, and preparing accounting and budget allocations.
3. Reduce Inefficiency & Manual Errors
Increasingly, business leaders are realizing highly repetitive tasks are better fulfilled by technology. Every business needs its process to be faster and more cost-effective, and intelligent automation is a great starting point.
An IDC study shows inefficiencies can cost companies anywhere from 20% to 30% of their revenue annually. A Coveo study adds that some estimates have knowledge workers wasting up to as much as 3.6 hours a day hunting for data, finding and correcting errors, and searching for confirmation of data they do not trust. Additionally, human errors can cost a company both time and money.
Transforming your accounting function will help reduce the risk of these inefficiencies and errors by creating formal systems and smart workflows, automating manual tasks, tracking the details that matter to you, allowing for an easier audit trail, creating a separation of duties, and improving internal controls.
4. Minimize Risk & Streamline Your Audit
Whether required by regulatory agencies, financial institutions, or your stakeholders, audits are an unavoidable part of doing business. However, audit preparation requires a lot of extra effort on top of regular operations. Not being auditable can limit your access to capital and other growth opportunities. Being inefficient during an audit can result in errors or delays that could give way to audit findings, penalties, or even damaged reputation.
For less mature accounting functions, modernizing can mean documenting your roles and responsibilities, processes, and policies to give your auditor insight into your business. Simply understanding where everything is located, who is responsible for what piece of information, and how your organization accounts for specific transactions will help ensure the early stages of an audit are easier.
As your accounting function gets more mature, accounting transformation can allow you to manage audit requests and PBCs from a single source or platform. Information can be shared with your auditor through unique accesses and roles, which will help with storage, time and expense changes, and other unnecessary costs. This will help improve the auditor’s visibility and help reduce bottlenecks and other delays. In certain instances, using automation tools can even lead to lower audit fees as the burdens of many tasks are significantly reduced.
Month end close optimization software can be particularly helpful regarding your business’ audit. These software solutions often have a compliance feature, which is an integrated, cloud-based solution for identifying risk and executing control workflows, allowing users to seamlessly link controls to related risks, narratives, and projects, and ensure version control across records.
Additionally, management can see and monitor all control-related activity through powerful, highly customizable reports. Auditors have access to the portal, allowing your company to share necessary information and documentation. These solutions can lead to up to 80% time saved in preparing compliance-related documentation and up to 50% reduction in time spent on audits.
5. Improve Employee Training, Collaboration, & Retention
A recent PwC pulse survey revealed executives continue to worry about recruiting, retaining, and training top quality employees. Modernizing your accounting function can help your organization foster a culture of collaboration throughout the organization and with external stakeholders and partners. Additionally, accounting transformation will help drive innovation and continuous improvement.
The baby boomer generation represents about 43% of AICPA membership, used for our purposes as a rough approximation of representation, meaning a substantial percentage of CPAs in the workforce is nearing retirement age. Additionally, every year fewer people are graduating with accounting degrees relative to the number of accounting positions, meaning this is a problem that will not be solved soon. This trend of decreasing accounting graduates while the number of accounting positions increases is happening simultaneously as regulatory requirements and optic problems are increasing. In fact, some employee surveys show one in four employees plan to quit their jobs due to inadequate business processes.
The best way to retain quality staff is through continuous improvements in back-end technology, like the software solutions discussed earlier. Through these technologies, mundane work is made easier, freeing accountants for more interesting value-added projects. They also help automate manual tasks, allowing management to make sound and timely business decisions from valid results. Technology and software solutions are intended to support and improve the accounting function, not replace it.
How Centri Can Help
The goal of this article was to highlight how using accounting transformation can help your business achieve more. By partnering with Centri, you can do just that. Our Accounting Transformation practice is focused on solutions for foundational accounting needs, optimized processes, and advanced digital controllership, which increase productivity, reduce costs, and improve reporting. Our experts will guide and support you through each stage of transformation, so you can rebuild an accounting department that meets your current and future needs. Contact us to learn how we can set your business up for success.
Managing Director | Accounting Transformation Practice | CPA
Garrett is a Managing Director in the Accounting Transformation Practice at Centri Business Consulting. He has more than 13 years of experience in public accounting, consulting, and industry. He joined Centri in September 2022, where...
About Centri Business Consulting, LLC
Centri Business Consulting provides the highest quality advisory consulting services to its clients by being reliable and responsive to their needs. Centri provides companies with the expertise they need to meet their reporting demands. Centri specializes in financial reporting, internal controls, technical accounting research, valuation, mergers & acquisitions, and tax, CFO and HR advisory services for companies of various sizes and industries. From complex technical accounting transactions to monthly financial reporting, our professionals can offer any organization the specialized expertise and multilayered skillsets to ensure the project is completed timely and accurately.
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