Tips to Improve Accounting Department Performance

CFOs should simplify & automate accounting. Accounting is full of tasks that don't have a high perceived value. If you don't streamline, you won't have time to produce high value items. At it's core, accounting focuses on: -Coding transactions -Managing AR/AP -Validating balances -Adjusting to accrual -Compliance Here are some ideas to simplify: -Streamline the COA -Use clearing accounts (wisely) -Triangulate supportable data (CRM, MRP, etc) -Manage AR/AP with the cash forecast -Monthly close checklist -Compare actuals to forecast -Outsource low value items -Elevate laborers -Use expense management tech Using these techniques, I've been able to: -Free up labor -Have better visibility -Set the stage for FP&A -Produce valuable reporting -Cut accounting time in half (or more) -Safeguard with less cumbersome controls And more importantly: -Less work -Less headache -More value to you -More value to company All without a new ERP.

A lean finance team is not only defined by size, but also by efficiency. Here’s 10 actions to create a lean finance team that produces more with less.. 1. Reduce the amount of account codes for the P/L. Create as many accounts in the chart of accounts as needed to give a detailed view of the financial activity, but don’t create uneccessary noice when it comes to reviewing financial data. 2. Forecast monthly in addition to annually. Monthly forecasts gives management insight into where the company stands so necessary actions can be implemented early. 3. Break down the company’s annual growth plan into twelve strategic monthly plans. Breaking a large plan down into smaller plans helps allocate funds better, stay on budget, and focus on executing one strategy before moving on to the next. 4. Create an annual budget that’s funded monthly or quarterly through a rolling forecast and planing analysis. Funding budgets monthly leaves room for changes before money is spent, 5. Reduce large monthly financial reports to a one (no more than two) page finance report that highlights current financial wins, current financial goals, current strategy and relevant KPIs. Eliminate printed reports if not required. 6. Reporting on performance measures that are not current or relevant – split measures into four types (KPIs, PIs, KRIs an RIs). Eliminate excessive details, duplicate data, and storing excessive data in various databases. 7. Develop a fluid communication process that eliminates time wasted waiting for an approval, response to an email or for data to be submitted before the next step in a process can be completed. 8. Use Excel where appropriate or necessary, but eliminate and automate spreadsheets with more than 100 rows.Large spreadsheets can take up a lot of valuable time that can be spent more strategically. 9. Consistently review and improve processes. Instead of continually adding new processes, consider ways to revamp current process to integrate new tasks. Develop an improvement process where employees identify areas of improvement and eliminate waste from their work processes. 10. Invest in automation for Accounts Payable and Receivable. Eliminate highly skilled employees doing unskilled tasks or tasks that can be automated Use employee’s time to create new or more revenue, and followup on sensitive overdue payments. Best-in-class finance functions establish lean processes using standardization of roles and responsibilities, automation of routine processes and procedures, and/or shared services which ensure less cost and higher level of agility, performance and productivity. Eliminating waste in finance processes is a huge step towards best practices and high-performing finance function. ______________________ Please share your thoughts in the comments ➕ Follow me for more finance insights #business #finance #entrepreneur #financemanager #cfo.

I never thought about the challenges that CFOs coming from FP&A and other functions face when having to lead an accounting team... until I came accross this question: "As a CFO with a background in FP&A, how can I best assess and improve the capabilities of my accounting team?" Here's what I would recommend any non-CPA CFO in this case: 1️⃣ 𝐒𝐭𝐚𝐫𝐭 𝐰𝐢𝐭𝐡 𝐭𝐡𝐞 𝐞𝐱𝐭𝐞𝐫𝐧𝐚𝐥 𝐚𝐮𝐝𝐢𝐭𝐨𝐫𝐬 Leverage your external auditors to get insights on how the current team is doing in terms of internal controls, ability to quickly and acurately respond to requests etc... 💡 Do it on or off the record. 2️⃣ 𝐈𝐝𝐞𝐧𝐭𝐢𝐟𝐲 𝐲𝐨𝐮𝐫 𝐢𝐧𝐭𝐞𝐫𝐧𝐚𝐥 𝐦𝐞𝐚𝐬𝐮𝐫𝐞𝐬 𝐨𝐟 𝐬𝐮𝐜𝐜𝐞𝐬𝐬 Ask for specific KPIs and information that indicate the strenghts of current processes, like days to close the month, AR and AP aging, the last time SOPs were updated etc.... 💡Connect with other CFOs or Controllers to get benchmarks & insights. 3️⃣ 𝐀 𝐠𝐨𝐨𝐝 𝐚𝐧𝐝 𝐡𝐚𝐩𝐩𝐲 𝐂𝐨𝐧𝐭𝐫𝐨𝐥𝐥𝐞𝐫 𝐢𝐬 𝐚 𝐥𝐢𝐟𝐞 𝐬𝐚𝐯𝐞𝐫 [At least that's what I keep telling my boss😅 ] Make sure your Controller is supported and has a strong technical background, especially when it comes to compliance and complex areas like revenue recognition and valuation. 💡 You should always ask them to always bring up complex accounting issues and connect with the auditors or another CPA firm for guidance while keeping you in the loop. 4️⃣ 𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝 𝐲𝐨𝐮𝐫 𝐆𝐀𝐀𝐏 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 Get a walkthough of the full accounting cycle and how your GAAP financial statements come together. 💡 Record those meetings if possible because it will be a lot of information at once. 💡 Have a consistent rythm to spot check financial statements and supporting reconciliation schedules of key areas. 5️⃣ 𝐍𝐮𝐫𝐭𝐮𝐫𝐞 𝐲𝐨𝐮𝐫 𝐭𝐞𝐚𝐦 Foster an environment of open and transparent communication within your accounting team. Regularly hold team meetings to discuss key financial matters, and provide updates on business performance. 💡 Consider leveraging client accounting services to augment the team's capacity, especially during busy seasons or for them to attend trainings. 𝐓𝐡𝐞 𝐛𝐨𝐭𝐭𝐨𝐦 𝐥𝐢𝐧𝐞: The fact that you do not have an accounting background is not a weakness. Accounting teams love hearing from their CFOs and what is going on in the company beyond the numbers. Now, let's turn to other CFOs and Controllers for more insights: > What else would you recommend to a non-CPA CFO? ------------------------------------------ 📢 I'm excited to announce that I'm launching a leadership onboarding program specifically for people stepping into first-time manager roles or advancing into higher positions like Controller or VP of Finance. If you or someone on your team would like to join the first cohort, send me a message ✉️