Does your Accounting Operation need improvement? 6 questions to help you find out…

The pace of business continues to speed up in the age of the connected economy.  Businesses are constantly challenged to come up with more efficient and productive ways of operating to stay competitive and profitable.    One area that can help you make better decisions is accounting.  However, this can be one critical area that business owners are often reluctant to touch.  With today’s technology, it can offer the best ROI in terms of reducing transaction costs and helping you get better information to make better decisions  (Accenture, Deloitte also confirm this). Here is how to determine if your accounting has room for improvement: Is the total cost of your transactional accounting function less than 2.5% of revenues? Do you have a completed set of financials and variance analysis completed by the second work day every month? Do you have key accounts (banks, credit cards, vendor and customer accounts) reconciled by the fifth work day? Can you get real-time reports of how much you are spending by vendor and services compared to expectations/budgets? Do you have real-time cash reporting and a rolling 16 weeks forecast of cash and revenue? Do you have real-time reports on your inventory turns and sell through by product? If you have answered NO to even one of these questions then you need to look at improving your accounting practices. Logicon Solutions has helped business owners transform their finance and accounting teams into a cash flow generating, business building, decision support powerhouse.  Exciting? Yes! We can show you how improving your accounting will consistently help you make better decisions for your company. Schedule a free...

Benchmark your IT Costs

http://www.gartner.com/technology/metrics/   1. The Purpose to Do IT Spend Benchmarking CIO must do some benchmarking not only to justify the dollar amounts spent but also to make sure that the company is spending a reasonable portion of its revenue on IT relative to other companies in the industry to be able to keep it in business in the long run. Cost Optimization: Adjustments should be made to these IT spending numbers by shifting the spending figures on a yearly basis after closely evaluating the key IT performance metrics in a micro and macro environment to achieve cost optimization for the business. The bottom line is that the CIO should be able to show that with the multi-million dollar investment in IT that he is proposing, the company will achieve a lower overall expense in the future. IT spending per worker seems to be more consistent but still widely variable. What is always true is that there will be IT spend that can be cut or avoided and there is more value that can be extracted. Benchmarking is a way of learning from other organizations: Comparing to external benchmarks is a healthy exercise and positions the CIO as a critical thinker who assesses the company from both an internal and external perspective. Tangible benefits can also be realized. But it is not to construct measures to beat the internal organization into submission. Sadly such crude measures have led organizations to make decisions that are based on short-term cost savings that lead to higher costs downstream or even worse, loss of competitive position. Most CEO & CFO are interested in benchmark data...

Improving Efficiency of Financial Reporting

The manual process of completing a business’s external or public reporting has become unnecessarily time consuming, often leaving employees over burdened with busy work. What many CPA’s, CFO’s and other executives are starting to realize, is that by automating these processes preparation time can be dramatically reduced, and incorrect disclosures can be avoided. How are manual processes ineffective? A majority of financial statements are prepared using Word and Excel, leading to a process that consists of thousands of manual steps. These steps include a large amount of typing, copying and pasting, as well as revisions and maintenance across multiple documents. When a change is made to just one number, it often has to be reflected in several other places. All of these manual steps leave the door wide open for input errors and inconsistencies, which can cause an incorrect disclosure. Moreover, compliance rarely dictates the structure of manual reporting, giving rise to inefficiencies and lack of attention to current standards. How can the right automation software improve efficiency? The biggest boost in efficiency that automation generates is through the 100’s of hours of time it can save. One of the most effective pieces of automation software we have come across, is from IFRS System, and with it companies saw preparation time reduced by hundreds of hours. A big reason for the amount of time saved through automation is the elimination of consolidation spreadsheets. Instead of 20+ drafts, employees in charge of public reporting would only have to work through up to 4 drafts. This obviously entails a change to pre-existing processes, but it will ultimately increase productivity and improve...

Keys to Successful Financial Planning and Analysis

After working with so many finance functions in a wide variety of industries, one common challenge they are constantly facing is how to conduct good planning and analysis that is valued by their internal customers, be it sales, IT, marketing, manufacturing or supply chain. The plethora of data, tools and techniques available to finance professionals is also overwhelming at times. Nevertheless, there are some basic ‘keys’ to FP&A that ensure that the finance professional becomes that ‘trusted advisor’ providing high quality planning and analysis to their business colleagues. Clean, high quality transactional data – make sure you have quality data coming in. One touch accounting – Data should be entered once or captured automatically Two day close or less – you need time to think and understand your numbers.  Getting bogged down in closing the books will limit that time Automated reporting – you shouldn’t be generating any financial statements in excel in this day. Ruthless prioritization of work – time is fixed for everyone.  Make sure you focus on what’s going to make you and your company succeed. Define the service levels with your partners – it will allow you to better acheive 5 based on where you fit into their process and work flows Keep your tools sharp and organized – make sure you leverage the most recent solutions from your software providers (i.e. Microsoft).  They have built in functionality that can automate previous manual tasks. Ensure everyone understands the process – this will help reduce stress and focus the discussion on what to do as opposed to what are the numbers. Ensure you understand the difference between...

Variance Analysis and Decision Support – The differentiator for the future

As our society becomes more digital and data compilation is becoming close to free, it is becoming more and more clear to our team on which organizations will survive and which ones will be shrinking and dying in the years ahead.   While companies are still using excel to do some basic analysis, what is quite surprising is that alot of finance and accounting professionals are still not aware of or have not leveraged the power of data management and mining technologies for their company.  In fact, a lot of them risk being marginalized by the rise of the data scientist and being overtaken and put out of business by their competitors. At a recent course we taught on variance analysis, of the 32 attendees from a wide range of organizations, only one was implementing an automated variance analysis and decision support system to capture and provide data from multiple points in their processes to help their business make better decisions.   A vast majority of the attendees were still conducting variance analysis in excel, only on their income statement and some of them 15 to 20 days after the month end. Of all the clients we work with, we are now seeing some of them becoming poised to take advantage of the opportunities in today’s marketplace and monetize those opportunities due to their investments in following systems: Automated accounting processes (purchase to pay, order to cash, reconciliations) that leverage the network effect while reducing transaction costs to less than $1 per Centralized data repositories of both financial, performance and market data that allow 360, 3-d views of the business and the markets they are operating...

Office Automation System

One of the biggest problems we see at many companies we visit are overworked staff in the back office.  We see many of them are just trying to survive, getting their work done with the tools given to them with no understanding or knowledge how to make work more enjoyable or free up time for customer service, innovation or taking on more work. With the rapid expansion of the internet, the increased digitization of data and rapid decrease in technology costs, employees and companies can now put in a office automation system that will reduce overtime, processing times and improve morale. To begin building your office automation system, I recommend you ask three questions: What process or tasks causes me the most stress or anxiety that I would like to have an office automation system take over? If there is one task that I would like an office automation system to take over, what would it be? What would be the benefits to me and our company be by putting in this office automation system? The benefits of asking these three questions is it will begin to activate your creativity and allow to begin to see that cost effective solutions to automate your problems are now available to you.  It will allow you to ‘connect the dots’ by seeing how leveraging a bit of technology at the right task or step in the process will generate huge returns. In conclusion, identifying opportunities for a office automation system is not hard.  It just takes effort to slow down and pay attention to what is going on around you.  You will...
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