Continuous Accounting starts with continuous process improvement, writes Terry Smagh.
We are all creatures of habit, and it can be comforting to begin each workday knowing that everything will be familiar – except for the occasional (and unwanted) surprise, of course.
Change seems risky, and besides: you have all of your well-known processes and routines in place.
But if you’re completely honest, the repetitive tasks that dominate your time aren’t tapping into your talent. And some of the processes performed by your teams may create more risk than you want to admit.
If you automate a bad process, it’s still a bad process
Many organisations look to the cloud or finance technology for the solution, and rightly so. But if you make these moves without first revisiting your processes, not only will the inefficiencies remain. You and your finance and accounting teams will also reap fewer benefits from a new platform.
To avoid making this mistake, successful organisations take a deliberate but stepwise approach as they shift to a mentality of continuous improvement.
Gary Simon, chief executive of FSN, recommends this: “Start with a mindset that says, ‘I’m not going to do everything in one big bang. I’m going to make gradual improvements to the process.’ When you’re time constrained, you’re not actually going to be able to do everything at once. So you have to build into your mindset that you’re going to make continuous change.”
This makes process improvement more manageable and allows your teams to begin to see results earlier – such as fewer hours spent on transactional activities and more time to focus on analysing the data and reports.
The ability to focus on more meaningful activities also inspires a more motivated, committed workforce. As employees feel empowered to seek and suggest a better way, they become more likely to improve and grow in the organisation.
All of this reinforces the vitality of Continuous Accounting in 2018. This modern approach lays a foundation for real-time data to fuel analytics, and gives CFOs a clearer picture of the strengths and weaknesses of the business.
Continuous Accounting embeds automation, control and period-end tasks within daily activities to align the accounting schedule with the rest of business. This allows accountants to process data and transactions as they come in, significantly shortening the financial close and producing real-time reporting, analysis, and awareness.
Here are three ways to empower your teams to take a Continuous Accounting approach.
1. Challenge the way it’s always been done
It’s taken a long time for innovation to find its place in accounting and finance, and now is the time to challenge your company’s processes.
Don’t just accept the way things have always been done. Instead, challenge it. Leverage problem solving and critical thinking skills to uncover better models. This drives streamlined processes and eliminates unnecessary steps, reducing the volume of work and improving quality.
This revised mindset can elevate your role within the organisation and set an example for your teams to follow. The employee accepts the status quo. The leader challenges it.
2. Take ownership
As you’re beginning to challenge and streamline processes, take the time to perform post-mortem reviews to identify what went right and what went wrong. Seek out root causes, and incorporate what you’ve learned into a continuous improvement model.
The best performing finance teams know that success means always adapting, innovating, and improving to create a culture of continuous improvement.
Looking for new ways to design inefficient processes can help you and your teams feel more invested, as you’re playing an essential part in meeting the evolving needs of the broader organisation – both now and into the future.
Establishing best practices and applying the right technology will deliver new levels of efficiency, control, and visibility across your accounting and finance operations.
3. Set standardisation with tasks
Finally, as you improve your internal processes and workflow try implementing a task management management solution as your most effective next step.
Recurring tasks are common in all aspects of the financial close, from payroll and procurement to consolidation and reporting. A task management solution can map what needs to be done in each area, providing visibility and measurability along the way. Tasks can be distributed throughout the period and across resources to reduce bottlenecks.
Chances are that every close process has room for improvement. Start with “pencils down” or consolidation as your milestone task. Then break down deliverables by department. Next, evaluate tasks by individual. As you begin to aggregate tasks, identify KPIs and report on them to measure success. Identify inefficiencies and tackle “low-hanging fruit first”. Build on your success, and re-purpose time saved with “quick wins” to focus on larger initiatives down the road.
This article is sponsored by BlackLine. Terry Smagh is senior vice president APAC at financial automation software provider, BlackLine.