As noted in the “Cloud Accounting Blog,” the role of the CFO and the accounting department in an organization are changing and for the better!
Long gone are the days where finance professionals were type-casted as number crunchers! The “Cloud Accounting Blog” surveyed 500+ CFOs and found that the reoccurring theme of their advice was that finance is no longer just a numbers game, its a value-added game. This higher expectation coupled with additional job tasks defined with a vague term like value-added lends its hand to an important question: what is value added for a finance professional?
The CFO/the accounting professional is a key playmaker for their corporation. Value is trumping financial gatekeeping and creating a greater need for collaboration. “Value-added” is what the finance professional is providing through collaboration that often occurs amongst not just accountants but with other members of the company. This necessitates the use of tools that allow for finance departments to not only communicate more widely amongst themselves, but also, with those outside of the department for increased transparency. Reports need to be available readily and they need to be easy to digest.
Accounting professionals have found through the use of a SaaS based revenue recognition software, everyone has access to the best numbers reflecting company value. Ease of use should be a priority with that software because not everyone you communicate with is as financially literate as an accountant. Putting yourself in the position to be a key contributor to your company’s goals is the type of positioning that will spur your career. This is done through investing in yourself as much as your company with the tools that allow you to continue making the best use of your time and skills while meeting these new demands in the brave new world of value-added accounting.
Accounting is not the lone wolf department anymore. Accounting departments today possesses key team players contributing to how a corporation operates and makes decisions. The responsibilities added by this shift could potentially overwhelm a department that has not made the small investments in tools such as SaaS that automates revenue recognition all while providing automatic, elegant reports that make this type of collaboration a breeze!
“Cloud Accounting” Blog Post (http://cloudaccountingblog.com/2016/04/12/7-surprising-insights-highlights-from-recent-survey-of-500-cfos/)
Business-risk interest groups have found that spreadsheets are hotbeds for risk. Spreadsheets have an astronomically high statistical likelihood of containing an error when managing data such as revenue. Let’s talk about how you can quantify this risk specifically to your business.
In 2013, the University of Hawaii’s Ray Panko, as noted by MarketWatch, found that spreadsheets, even after thorough examination for error, contain 1% or more errors for all formula cells. The larger your spreadsheet and this risk compounds. The original article cited an average of 88% of spreadsheets will have an error that is overlooked. Even when one extensively educated, brilliant accountant or finance buff is put in charge and is meticulous in editing, errors are occurring. It’s not reasonable to expect an individual to catch the disastrous error(s) in what is often thousands of cells.
Spreadsheets are great for calculations, but not for routine data! If you are in the technology or Software as as Service industry, as directly cited from renowned BYU professors Jim Stice and Kay Stice, revenue recognition is routine data as it is necessary data! Especially if you are a start-up, revenue recognition highlights the value and potential of your product and company bring to the market. You don’t want any errors on your highlight reel! It will lead to either a devastating drop in your evaluation or an undervaluation. Both are detrimental to growth.
Take the time to calculate/forecast what it would mean for your growth and numbers for an error in revenue recognition that even your best and brightest brightest will statistically miss.
Spreadsheets are going to contain errors: 1% or more for all formula cells and for an average of 88% of spreadsheets. Have your earnings management team automate your revenue recognition with a revenue recognition software. Your highlight reel should speak to your potential, not your potential for error!
(MarketWatch Article: http://www.marketwatch.com/story/88-of-spreadsheets-have-errors-2013-04-17)
(Jim and Kay Stice on Revenue Recognition https://www.lynda.com/Accounting-tutorials/Running-Profitable-Business-Revenue-Recognition/383050-2.html)