Cutting-Edge Finance and Accounting Processes: 2019 Edition

The world of finance and accounting is changing so rapidly that unless you spend a large portion of your time attending FP&A conferences, it’s hard to know what your competition is doing to stay ahead of you. While you may have optimized your internal FP&A and Accounting processes, other companies are fundamentally transforming their organizations by adopting three key leading practices:

1. Agile Planning
2. Continuous Close
3. Mobile-Centric Reporting & Analysis

While your CFO may not be pushing for all of these simultaneously, it’s important you stay informed and advise her that modern organizations are not adopting an “if it ain’t broke, don’t fix it” mentality, but rather an ethos of “just because something works, it doesn’t mean it can’t be improved” (to quote Princess Shuri from Black Panther).

Agile Planning

Scenario Planning has been all the rage for the last few years as companies realized that planning for a single number means planning to be wrong. We have no way of truly predicting the future but we can make educated guesses about likely situations that might occur… and then create plans for those situations.

Agile Planning is the next evolution of Scenario Planning. There’s a great article on Agile Planning in Harvard Business Review (https://hbr.org/2018/09/planning-doesnt-have-to-be-the-enemy-of-agile) if you want further details, but I’ll oversummarize by saying:

Agile Planning is focusing on timeliness over precision and analysis over reporting.

In other words, it’s better to have a plan that’s recent at high-level versus one that’s detailed but out-of-date. The goal is to have a better understanding of the immediate direction your company or area is headed so that you can make quick, data-driven changes. My advice to companies is that as you’re implementing Scenario Planning, go beyond and ask how to make your planning process more agile. And as Stephen Covey said, “begin with the end in mind.” Make sure that what you’re planning is designed to be analyzed so that it leads directly to a physical action.

Continuous Close

Ten years ago, business was changing slowly enough that you could wait 10+ days into the following month to find out what happened in the last month. As companies are pushing to reduce their close cycle, innovative Accounting departments are starting to ask themselves, “what is inherently different about the end of a month, quarter, or year?” When they realize that it’s nothing more than turning a calendar page (virtually, nowadays), it frees the Controller up to look at Close differently.

Continuous Close is the process of closing your books constantly. For example, if an intercompany comes in on the eleventh day of the month, validate that you have both sides of the entry on the eleventh day. Don’t wait until the end of the month to batch up routine financial close tasks, but do them as they happen: data feeds, reconciliations, accruals, and so on. Instead of taking Task X and saying it happens on close days Y through Z, break it into smaller parts and do it throughout the month. There are lots of things required to adopt Continuous Close like RPA (Robotic Process Automation) but fundamentally, it’s a different mindset. Just as Forecasting should not just be “Budgeting but more often”, Continuous Close requires a complete reimagining of your consolidation and close process.

Mobile-Centric Reporting & Analysis

I’m guessing that your mobile phone is currently within one meter of your hand (unless you’re reading a printout of this article in the shower in which case, kudos to you for multitasking), yet the majority of companies assume that you will wait to report and analyze information until you’re sitting back at your computer in your office. If you’re in a meeting and you didn’t bring a report or your laptop, you’re out of luck and forget about making data-driven decisions while you’re moving from place to place.

Why isn’t more analysis done on mobile? Because traditional companies are looking at the traditional way of reporting and saying “that looks horrible on a mobile phone.” That’s true: if you’ve ever tried to study an income statement or analyze a dashboard on your cell, you’ve either gotten angry or gone blind. The solution is to stop trying to port your desktop-centric reporting & analysis to mobile, but instead, design with mobile in mind… then port that to a desktop.

My advice is that any new analytics you create should begin with the question “how can I display this in a way that lets a business person take an immediate action based on this data no matter where they are?” It’s fine if something they find on mobile leads them to a desktop for detailed inquiry, but please don’t start by assuming someone is chained to their desk constantly.

State of Business Analytics

Every year, I survey 250+ companies on the current state of their planning, consolidation, reporting, and analysis areas. I then aggregate all this information so that the whole industry can get an idea of what KPIs they should be measuring, how they stack up against other companies, and what trends are emerging around the world.

As a favor to the community, I share all this information freely to anyone who completes the survey. If you want to join us, the global webinar is on January 30th. If you want an invite to the free webinar, go to http://epm.bi/Surveyer and in less than 20 minutes, you’ll have a much better idea of what you should be measuring in your journey of constant financial improvement.

Take the survey at EPM.BI/Surveyer and be on the cutting-edge of Finance and Accounting.