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"Today's finance and accounting requirements for businesses represent a
quantum leap in complexity from what was required even 10 years ago. For growing companies and nonprofit
organizations, the high-quality accounting and financial expertise that they require are often beyond
their means."
Source : Corefino
Finance Transformation and Routine Accounting: Enabling the Corporate Controller’s Role as a Strategic Contributor
Accounting is also known as :
Accountancy,
Accountants,
Accounting Accountancy,
Accounting Accounts,
Accounting Analysis,
Accounting Applications,
Accounting Articles,
Accounting Assets,
Accounting Audit,
Accounting Balance Sheet,
Accounting Basics,
Accounting Bookkeeping,
Accounting Classification,
Accounting Companies,
Accounting Costs,
Accounting Definition,
Accounting Depreciation,
Accounting Employment,
Accounting Examples,
Accounting Expenses,
Accounting Finance,
Accounting Forms,
Accounting Functions,
Accounting Help,
Accounting History,
Accounting Income,
Accounting Info,
Accounting Information,
Accounting Method,
Accounting News,
Accounting Notes,
Accounting Now,
Accounting Package,
Accounting Paper,
Accounting Problems,
Accounting Profit,
Accounting Questions,
Accounting Regulations,
Accounting Reports,
Accounting Resources,
Accounting Sales,
Accounting Service,
Accounting Software.
FINANCE TRANSFORMATION AND ROUTINE ACCOUNTING
Enabling the Corporate Controller’s Role as a Strategic Contributor
Throughout the history of accounting, the first role of the Corporate
Controller has been ensuring corporate financial controls and, as a very distant
second, making strategic business contributions. That gap widened mightily near
the end of the 20th century. The installation of on-premise ERP and accounting
software corralled even the most business-minded controllers into the demanding
role of financial software aficionado, or at the very least, caretaker.
Today, when controllers aren’t installing, adjusting, or adding to their
software deployments, they are mentoring and monitoring their on-premise staffs
to coax needed reports out of these systems. The goal, of course, is to
facilitate operations to close the books, produce audit-ready reports and be
ready to deliver whatever numbers their CFOs, CEOs or auditors want – whenever
they want them.
With so many responsibilities to address, finance transformation (the process
of realigning and streamlining finance functions) for routine accounting would
be logically a top priority for controllers. However, guidance and practical
strategies to achieve finance transformation has been sorely lacking.
In fact, many finance stakeholders and related parties -- CFOs, accountants,
auditors, service providers, consultants, and software vendors -- recognize the
value in enterprise finance transformation, but the infrastructure/methodologies
just haven’t been there in an economically viable way. Today there are now
practical options coming from a new breed of vendor which enable finance
transformation and, in the process, can help elevate the role of controller to
strategic enterprise contributor.
WHAT FINANCE TRANSFORMATION ACCOMPLISHES …AND HOW TO GET THERE
Efficient and cost-effective finance processes that are dependable, risk
adverse and consistent are always necessary for an enterprise to truly thrive.
But in today’s economy, with mounting pressure for performance improvements,
finance transformation is even more of an imperative for all businesses. The
process of finance transformation is distinct for each enterprise. What will
remain constant are the major elements that are a combination of redefined
business processes, supplemental professional services, and IT solutions that
support and define a ‘transformed’ finance landscape. The perfect combination of
elements in a successful finance transformation will accomplish three main
goals:
- Optimize the financial business processes of an enterprise
- Create a framework to lower the total cost of finance processes
- Increase marketplace competitiveness of an enterprise
From a broader financial perspective, finance transformation addresses
various issues, such as maintaining stability during non-routine business
periods (e.g., mergers, divestitures, down economic cycles); addressing
talent shortages; assuring internal stakeholders, such as the CEO and CFO, that
regulatory and financial processes are defensible; and/or delivering more
insightful data environment for financial decision making.
However, the one missing link in most finance transformation models is
providing the Corporate Controller with a fresh approach to less time-intensive,
people-heavy paradigms for delivering routine accounting information.
Addressing the Controller’s Needs in Finance Transformation
To make a finance transformation project valuable to the Controller as well
as other financial stakeholders (such as the CFO or accounting personnel) basic
tactical requirements and problems must be addressed. Processes and solutions
included in the finance transformation project must include those that impact
the role of Controller such as:
- Monthly and annual financial reporting
- Financial regulatory and compliance issues
- Tax planning and annual audits
- Global tax compliance
- Financial planning and analysis (e.g., budgeting, forecasting, variance
analysis)
- Internal controls and corporate governance
Many enterprises that have not undergone finance transformation still depend
solely on basic ERP systems to supply the Controller with data and controls to
address these issues. This is regardless of whether the ERP system can support
budgeting, tax processes, internal controls or any of the crucial elements that
falls under the controller responsibility umbrella.
THE MISSING LINK: FINANCE TRANSFORMATION SUPPORT FOR ROUTINE ACCOUNTING
The need for consistent and reliable audit-ready financials is an established
imperative, but what’s not been defined well among organizations nor
established, support-wise, by vendor partners is a finance transformation
framework for Controllers. Controllers direct the preparation of financial
reports, such as income statements, balance sheets, and analyses of future
earnings or expenses, that summarize and forecast the organization’s financial
position. Controllers also are in charge of preparing special reports required
by regulatory authorities. Often, controllers oversee the accounting, audit, and
budget departments. So to achieve finance transformation for routine accounting,
an enterprise will have to address three parts:
- Finance Support and Expertise
- Technology Solutions and Infrastructure
- Best Practices Framework for Improved Business Processes
These three parts are crucial to deliver different elements of support to the
Controller, as shown in Figure 1. Finance staff is needed to deliver accounting
expertise for everyday issues like expense and revenue accounting, cash
management and tax preparations support. Technology solutions provide avenues
(e.g., Software-as-a-Service, cloud computing configurations) for real-time
access to data and financial information across business units. Finally,
improved best practices and workflow frameworks support solid business process
improvement for accounting, financial reporting and internal control, among
other finance processes.
As important as this formula is to elevate the Controller and transform
finance it is not easy to achieve. For many enterprises, these three elements
that address people, IT and business processes are not best served via a
traditional ERP approach. The buy-install-maintain software cycle is
unfortunately still a large part of many job descriptions for Controllers and
leading the integrations of new ERP systems can turn talented financial talent
into second rate-IT personnel. To avoid this problem, enterprises need to look
beyond traditional ways to help the controller achieve a big-picture view of
finance. Therefore what is now needed for enterprises that cannot afford or
don’t want to allocate time and personnel to the black hole of standard ERP is a
new approach and model.
What have emerged from this inefficient scenario are new IT solutions that
are in turn creating new IT markets. Vendors, such as Corefino, have created
unique offerings to not only address Controller issues but that resonate
favorably with CFOs who are looking to achieve finance transformation.
By offering a hybrid IT solution-service approach to clients, Corefino
directly speaks to Controllers and CFOs to remove problems from their
overflowing plates of responsibility. This new type of finance model
offers the professional expertise of business process outsourcing with the
latest IT solutions for cloud computing and Software-as-a-Service, which
addresses immediate controller needs but also broader financial goals. This type
of support is crucial for a finance transformation that will create a more
strategic position for finance as well as the individual roles of the Controller
and the CFO.
MEASURING SUCCESS
A successful finance transformation creates several benefits. These benefits
include better utilization of corporate talent that is re-directed to address
business management challenges and opportunities. Direct cost savings can be
garnered through consolidation efforts of disparate financial functions and
removal of redundant processes or IT solutions. Further cost savings can also
come from areas such as:
- Migrating to one IT platform
- Moving finance departments to one business model
- Reductions in finance cost-to-revenue ratios
- More efficient business processes
- Savings realized through headcount reductions
These types of cost savings are the result of a successful finance
transformation, resulting in finance roles, such as the Controller and the CFO,
becoming high-performance players. Finance functions also become lower cost
components of the enterprise overall. But, for most enterprises the problem in
finance transformation is not a desire to achieve these savings, but where to
start and how to begin.
Both CFOs and Controllers will also need to turn to trusted partners, for
finance transformation support for important and recurring routine accounting
functions as well as more strategic finance efforts. In the past, these partners
have been mostly large enterprise software vendors and large business service
providers or consultants. While these types of partners may understand the
problems of finance, their costs and one-size-fits- all approach does not serve
most enterprises well.
The need for consistent and reliable IT solutions and services is one
critical aspect of any finance transformation project. An IT partner who offers
access to finance applications for processes such as accounting, payroll and
audit reports while also offering services that keep business process current
and compliant with GAAP (or IFRS) practices, provides a large portion of
necessary support for a successful finance transformation.
The new breed of IT provider, like Corefino, addresses the basic needs of
finance that impact Controllers and CFOs alike. By looking at the need for
finance efficiency and daily operations management, Corefino allows Controllers
and the finance group overall to free itself from predictable transaction
processing and establish financial directions for the enterprise. This solution
removes non-value add processes from the enterprise scene and creates the
framework for the strategic relationship between the Controller and CFO to
deepen.
THE QUEST FOR FINANICAL DIRECTION
The role of today’s controller runs the gamut from the data gatherer to the
“big-picture” observer. The corporate controller will still continue to drive
reporting processes but now is also needed to help establish financial direction
via hands-on intelligence that only that role can provide. However “handson”
should not mean “hands in” the ERP system. There are now alternative solutions
that can keep enterprises from diverting crucial finance personnel from
strategic business opportunities.
From the vendor perspective, a valuable solution set will need to addresses
core operations like accounting but also extend to address multiple types of
financial reporting, internal controls, due diligence, audit support, tax
process support and other specific financial services. Corefino offers this type
of amplified finance support that will strengthen enterprise financial
strategies.
Enterprises need to consider all options as the worldwide economic outlook,
mid-2009, remains uncertain. Performing finance tasks as they were performed
five years ago will not make sense for the future. New hybrid approaches that
combine finance expertise, IT solutions and business process improvements are an
attractive alternative to the past. This type of offering will only prove more
valuable to companies as finance becomes even more complex and potentially
disruptive but also integral to long-term enterprise fiscal health.