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Why Next-Generation Financial Consolidations are Overdue

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Next-Generation Financial Consolidations

Why Next-Generation Financial Consolidations are Overdue

The financial consolidation process has never been perfect. It’s a time- and labor-intensive process that eats up institutional resources and risks inaccurate or incomplete reporting. Even in businesses with relatively few business units to consolidate, the process commonly takes weeks and creates a lot of disruption and uncertainty along the way.

This has always been seen as a necessary evil. But even when the process was plagued by inefficiencies or inaccuracies, it was considered adequate for most companies. Improving consolidations was a goal, but it wasn’t a priority for many. Unfortunately, it’s about to become an obligation for all.

The Crunch on Consolidations

A survey of financial executives revealed that unparalleled pressures are coming to bear on the consolidation process. Just consider a few significant stats:

  • 90% of executives feel pressure to close books faster.
  • 61% of executives are unsatisfied with the quality of the close.
  • 70% of executives mistrust the numbers at close.

An imperfect process is getting worse because the methods of the past are inadequate for the demands of the present and future. Consolidations are getting vastly more complex as corporate footprints spread through markets, geographies, and regulatory frameworks. Relying on manual processes to manage vast and varied data sets is a losing battle.

Hitting benchmarks on shorter timelines only compounds the challenge. Decision makers depend on consolidated financial data to make crucial strategic decisions. Getting key financial insights ASAP is an obvious priority, and the longer the close takes the more the strategic window closes.

The final factor making this process harder is the fact that financial data has become a key strategic driver. The quality of that data is either an asset or a liability. So even as financial executives are dealing with more data in less time, they also have a mandate to extract the best insights available.

It’s not surprising that so many executives are dismayed by the state of consolidations. Understanding this issue will only get worse is important. Being proactive about finding a solution is even more important.

The Next Generation of Consolidation

The issues with the traditional consolidation process can largely be traced back to the preponderance of manual inputs on outdated spreadsheets. Luckily, those are eliminated by upgrading to an enterprise financial management solution.

When every business unit relies on the same shared platform it’s possible to automate consolidation process. That accelerates the time to close significantly and replaces human error with machine precision. It also enables companies to seamless scale the process up as they add business units and engineer growth.

A next-generation approach to consolidation is possible, and it’s a lot more accessible than what it replaces. You can learn more about why companies are embracing an upgrade by downloading this free white paper. When you’re ready to embrace an upgrade of your own, contact InCloud360.

 

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Performance in the Family Office: Turning Accounting into an Advantage

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Performance in the Family Office

Performance in the Family Office: Turning Accounting into an Advantage

Accounting has always been important in family offices, but it hasn’t always been urgent. Closing the books on a quarterly or even just annual basis was deemed acceptable. And even if accounting was slow or prone to error, it was considered adequate.

That may have once been true, but accounting standards have risen significantly in recent years. Instead of closing the books in weeks, in-depth reports are expected within days or even hours. The amount of data to consolidate and analyze is exploding as financial and operational data are combined. And compounding these issues is the fact that accurate, up-to-date financials are essential for effective decision making.

>The largest companies have been able to adapt to new accounting standards fairly easily, but the situation is not the same at family offices. Adding new staff, adopting new policies/practices, and meeting tougher benchmarks is challenging when it’s possible at all. Family offices are at a distinct disadvantage, and without an accounting upgrade will find it difficult to compete.

Luckily, a solution does not require a major new investment, it only requires a few new approaches. Use these three strategies to turn accounting and finance into an everyday advantage:

Speed Up the Time to Close

Faster close times allow accountants to close the books quicker and more often.That means key financial insights are available almost on demand. Dealing with expansive data on a shorter schedule is only possible when automation is handling more of the collection and analysis. The most time and labor-intensive aspects of closing the books are made automatic, allowing decision makers to spend more time applying insights and less time looking for them.

Break Down Data Silos

Speed is an asset, but improving the quality of reporting is important for family offices as well. Errors and omissions misrepresent the health of the business, and incomplete data leads to risky decision making. Relying on a single platform to access both financial and operational data means that key details are never being overlooked. And since all relevant data is aggregated and integrated, reports are as comprehensive and trustworthy as possible.

Approach Reporting in an Active Way

The traditional approach to reporting is backward looking. Closing the books interrupts the natural flow of operations while offering only a look at the past. That information is useful, but family offices would rather have guidance and forecasts for moving forward. When data is present on a single platform and enhanced with automated tools it’s possible to practice real-time reporting. Decision makers can instantly integrate whatever data they need and analyze it according to their strategic priorities. Consequentially, ambitious decision making is more accurate overall.

It’s easy for family offices to adopt a new approach if they embrace new tools as well.Sage Intacct is a financial management solution that makes world-class reporting accessible to any size office. When you’re ready to explore what Sage Intacct would look like in your business, contact the tight-knit team at InCloud360

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Controller Q&A: Ask These 5 Questions First

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Performance in the Family Office

Controller Q&A: Ask These 5 Questions First

As accounting has grown ever more important the role of the controller has grown as well. In addition to being sound financial stewards and effective organizational managers, they must also play a crucial strategic role. Controllers who are able to generate actionable, in-depth insights out of vast financial data give their companies a distinct strategic advantage.

Unfortunately, the opposite is true as well. Companies with an ineffective controller or a disorganized accounting department struggle to hold ground let alone gain an edge. That is why it’s incumbent on all CFOs to explore the effectiveness of controllers. Get the answers you need by asking these 5 questions first:

1 – What Role Do Manual Processes Play in the Closing Process?

The closing period is fast-paced and the consequences of mistakes and omissions are high. That is why manual processes should be avoided as much as possible. They are incredibly inefficient and create a high probability of error. Controllers who are too dependent on manual processes must adapt to the data-driven demands of modern accounting and consider the advantages of automation.

2 – What is the Company’s Regulatory Risk Exposure?

Most compliance issues flow through the controller’s office. This professional is in a unique position to understand the company’s risk exposure and mitigate the consequences of non-compliance. This role is especially important in companies that are expanding into new markets or territories. If a controller is unable to answer this question adequately it’s evidence of uncertainty and instability.

3 – How Long Does it Take to Close the Books?

When the year-end close takes too long due to lack of resources or internal inefficiencies it forces companies to be reactive. Since insights are slow to discover, companies are left looking backward rather than forward. If the close is determined to take too long it’s essential to identify the stumbling blocks and make speed (and accuracy) the top priorities.

4 – Is Excel Still a Commonly-Used Tool?

Excel spreadsheets were great for their time but have largely lost their utility in accounting. They are simply too outdated and underpowered to make managing huge financial data sets feasible. Even if other accounting tools have been introduced, controllers and their teams may still rely on Excel simply out of familiarity. Investigating how deep the issues runs says a lot about whether a controller is agile or entrenched.

5 – Do Financial Data and Operational Metrics Integrate?

Accounting departments are no longer isolated and specialized. It’s the controller’s job to make financial insights available to all departments and stakeholders. That is only possible and useful when financial data and operational metrics integrate easily, creating a 360-degree perspective on operations. Ask the controller how much of this data is integrated, how easy it is to integrate, and whether the integration continues in real time?

Getting to the heart of the problem is important, but the ultimate goal is to find solutions. We encourage all readers to download this free white-paper and explore the questions above in-depth. When you’re ready to have a one-to-one conversation about empowering the controller and optimizing accounting, contact InCloud360.

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Why Enterprise Technology is Essential to Professional Services Firms

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Professional Services Firms

Why Enterprise Technology is Essential to Professional Services Firms

Professional services firms are not behind the times in terms of technology. In fact, one survey showed that 95% of firms rely on best-of-breed technologies. But these firms are also not unique in struggling to use technology to the fullest.

The issue is that while individual capabilities may be strong, cross-functionality and interoperability are weak. Technology serves individual aspects of the enterprise but doesn’t extend across departments, data sets, or workflows. Consequently, tech tools cause as many problems as they solve.

Professional services firms, like many companies, are realizing that technology is essential to everything they do. Relying on a loose patchwork of applications leads unavoidably to mistakes, setbacks, and inefficiencies. In turn, those lead directly to poor client relations and lost business opportunities.

In order for technology to be a true asset it must perform at the enterprise level – a single platform that integrates professional service automation (PSA), business intelligence (BI), human capital management (HCM), and client relationship management (CRM). That way tech is seamless and streamlined rather than segmented and segregated.

Just consider some of the distinct advantages that arise after implementing enterprise technology:

  • Market Flexibility – Professional services firms must be dynamic in order to be competitive.Enterprise technology provides in-depth insights almost immediately, making decision making quick and confident. Plus, adapting a single system to organizational changes is much easier than adapting multiple systems.
  • Anytime Access – Data will always be incomplete, outdated, and inaccessible when it’s spread across multiple locations. When its integrated and updated in real time, by contrast, every stakeholder has access to a single source of truth. And thanks to the cloud-orientation of enterprise tech, this data is available at any time from anywhere.
  • Financial Maturity – Tracking more than just profits, losses, and basic financials is a major undertaking. Enterprise technology makes collecting and analyzing financial data quicker, easier, and more accurate. Firms are able to reach financial maturity by tracking accounting metrics broadly and deeply.
  • Ongoing Integrations – Professional services firms will only become more tech-driven. Enterprise-class tools easily accommodate new integrations and expansions, making it easy for firms to evolve without friction. They gain the foundation for true digital transformation.

Today’s advantages are tomorrow’s imperatives. Firms that already rely on enterprise technology are gaining market share. But firms that continue to make do with outdated and inadequate tech will find it difficult to serve the needs of future clients.

This free white paper explores enterprise technology and the future of professional services firms in-depth. We encourage everyone to read it and consider what is gained with an upgrade and what it lost without one. When you’re ready to explore how a solution fits into your firm, contact InCloud360.

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Increasing Project Profitability – 5 Strategies of Successful CFOs

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Increasing Project Profitability

Increasing Project Profitability – 5 Strategies of Successful CFOs

Today’s strategic CFOs have a central role to play in project-based businesses. With careful oversight and savvy strategic thinking, it’s possible for CFOs to maximize project profitability and directly grow the bottom line. Here are five strategies executives can take to cut costs and drive revenue:

Focus on Key Metrics

Large-scale data collection makes it possible for CFOs to track dozens or even hundreds of metrics. Each indicates something interesting, but only a few reveal the true performance of the project:

    • Bill Utilization
    • Project Margins
    • Annual Revenue Per Billable Consultant
    • Annual Revenue Per Employee

     

    The key is to identify the most important metrics and focus primarily on monitoring and improving those rather than others.

    Prioritize Data Analysis

    Collecting data is important, but the scope and scale only matters if it leads to better analytics and insights. CFOs who focus less on gathering data and more on analyzing/applying it extract greater value even from less data. When it’s time to make key decisions about what projects to pursue and how to improve them, CFOs have the in-depth understanding they need to act confidently.

    Empower Project Managers

    In project-based companies, there is a close relationship between finance, project managers, and client services. The representatives on the front lines depend on having instant access to accurate and up-to-date financial information, which is why CFOs should provide financial dashboards and encourage collaboration. With the right tools it’s possible for project participants at all levels to improve profitability.

    Study Costs on a Granular Level

    Companies that bill according to a fixed-cost project model must understand in detail where costs are coming from. Spreading the cost evenly across entities only obscures where inefficiency and waste exist. By tracking direct and indirect labor costs it’s possible for CFOs to single out the most and least profitable projects.

    Practice Data-Driven Decision Making

    Companies have lots of data at their disposable, but turning it into actionable insights remains a challenge. Stakeholders either don’t have access to the right data or don’t have the expertise to interpret data. The CFO can solve this by prioritizing communication and collaboration and integrating financial data with other data sets. When everyone is making decisions empirically and objectively the profitability of projects improves automatically.

    You can explore each of these strategies in-depth by downloading this free white paper. Once CFOs understand how to improve project profitability, the question becomes how to improve it faster? The answer is to implement a leading financial management solution like Sage Intacct.

    A suite of smart tools makes data more intuitive and more accessible. Stakeholders from the C-Suite down have the ability track and study projects in depth, taking less time to identify exactly what is working and what is not. If you’re ready to reap full value from your current projects and more value from your future ones, schedule a consultation with InCloud360.

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Project-Based Accounting Software – A Checklist for Success

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Project-Based Accounting Software

Project-Based Accounting Software – A Checklist for Success

The complexity of project-based accounting is only exacerbated by the need for accuracy, relevance, and currency. Technology helps to bridge the gap, but not every solution provides the real-world functionality companies require to make accounting into an asset.

Evaluating the depth and breadth of features a solution provides is essential due diligence. To ensure that any solution you’re considering is well suited to project-based accounting, look for these strengths:

  1. Flexible Accounting Architecture – Any solution should flexibly adapt to your existing accounting architecture. Rather than forcing you to adopt new workflows or implement customized code, the solution organically accommodates your present and future accounting needs.
  2. Simplified Time and Expense Management – When it’s simple to track time and expenses it’s easier to manage their effect on revenue. Plus, understanding where, when, and how resources are being used in a very precise way leads naturally to improvements.
  3. Accurate Project Costing – A system that accurately breaks down project costing in-depth makes it easier to forecast budgets and spot emerging trends. Greater visibility also leads to improved project pricing and creates bargaining power with vendors.
  4. Automated Project Billing – Meeting exacting billing requirements takes enormous amounts of human input and is highly-vulnerable to errors and mistakes. Automated project billing solves both problems and enables accountants to spend less time on data entry and more time on high-value projects.
  5. Streamlined Consolidations – Companies undergoing growth must quickly but carefully add accounting entities. An accounting solution should make that as easy as possible and automatically consolidate new data with existing data.
  6. Intelligent Profitability Forecasts – The success of a project-based business depends on strategically selecting projects. Tools that provide real-time business insights reveal what project/clients/markets are most profitable. Decision makers are able to act boldly but confidently in order to drive revenue.
  7. Modern Cloud Orientation – A cloud-based accounting solution provides greater flexibility, productivity, and accessibility while also being cheaper and less complex. Every one of the initiatives above is enhanced when the cloud is helping to do the heavy lifting.

None of these capabilities is more imperative than the others. More importantly, without any one of these features, a project-based accounting solution is likely to fall short. If the goal is to make accounting both better and easier, a solution must check every one of the boxes above.

This free whitepaper outlines exactly what kinds of tools and techniques to look for in your next accounting solution. To explore what they would look like in your company as well, contact InCloud360.