Problem: If your financial coordinators and directors hardly trust the month-end close numbers, is your financial reporting GAAP “compliant”?
Survey results show that only 19% of financial controllers and directors rely completely on their reported figures. Given that accounting standards worldwide are rooted in the belief that financial reports are as reliable as possible, it seems that 81% of companies are slipping through important aspects of GAAP (Generally Accepted Accounting Principles) in spite of all efforts to comply.
But why are so many companies falling through the cracks?
One potential reason finance departments are slipping through the GAAP (according to Forbes), is the handover of responsibilities from CFO to the Financial Controller (FC). The CFO is being expected to deal more with investors and external relations than internal financial reporting. As such, FCs are having to adopt the data reporting and analysis as well as the communication and presentation of that data – a job previously left to the CFO.
A suggested conclusion is that due to the ordinary tasks of the FCs, they now have less time to devote to managing the financial reconciliation and reporting process, instead leaving their financial staff to manage the workflow. Additionally, without this clear hands-on leadership the accounts department is left juggling the many monthly-close tasks without decisive oversight.
That is not our perception. Instead we believe it is the lack of an automation tool that is the core. Because without such a tool, a streamlined standardised month end close process is practically impossible to maintain, and even more: to decisively lead!
Time waits for no…financial professional
Besides finance departments are also under increased pressure to close the books on time. Unfortunately, only 35% of financial professionals say they are always able to report on the close date, and a whopping 79% said they were under pressure to close faster.
If finance departments are under so much pressure to close faster, yet 65% cannot be confident to report on time, then it starts to become clear where the problem lies.
“Mind the GAAP!”
One way of improving your financial reporting is to refine your account reconciliation processes. It is during the account reconciliation processes that mistakes are most often made and the most time is wasted.
Your first step to reconciliation best practice is to conduct a full reconciliation audit. You can find the necessary steps to complete this audit in the article Four Steps to Perfect Account Reconciliation.
Your next step is to investigate automated account reconciliation software. Not only does this software dramatically speed up the data matching process, it can also help by creating enhanced reports for the Financial Controller to present to the board.
Look for a solution that enables you to:
- Seize total control over the whole process from one dashboard
- Gain a real-time overview of the monthly close process
- Comply fully with all regulations by creating set rules
- Increase productivity by automating the grunt work
- Close your accounts and file your reports on time
The Adra Match enhanced account reconciliation software BALANCER does all this and more. You can see this brilliant solution to your reconciliation woes in action, just request a free demo of the balance sheet reconciliation software today.
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