Finance’s Elevated Role and Other Critical Trends for 2019

Finance’s Elevated Role and Other Critical Trends for 2019

The beginning of a new year always signals a time for trend spotting Which financial opportunities, challenges and changes should companies prepare for now? Below are six soon-to-be realities that you should consider for 2019.  .  

CFOs take on more responsibility.

The role of the CFO has merged with that of the COO to assume strategy and operations functions. This calls for greater collaboration in business areas such as marketing, procurement, sales and design/R&D in order for CFOs to build sound budget strategies and operational processes.

Customers’ changing demands disrupt industries.

Think of it as forced evolution. Millennials and Gen Z crowd are making their wishes known – pushing for greater transparency, asking for more sustainable products, embracing technical conveniences. Business has no choice but to respond – re-evolving business models, selling on social media, adopting voice-commerce, etc.

Technology makes finance smarter and faster.

Automation and new technologies are making finance software programs do more with less. This leaves more time for focusing on the organization’s strategic vision.

We’re grappling with uncertainty again.

From foreign policy to data regulation, businesses are operating under the strain of uncertainty. Expect another year of having to navigate a turbulent, highly politicized environment.

Even the workforce is evolving.

2019 will introduce a diverse generation of employees with new expectations and wants. For accounting, the skills gap widens, re-training requirements grow, and a higher level of contract employees emerges.

New data risks are surfacing 

Companies will need to have a deeper understanding of General Data Protection Regulation (GDPR), because there will be a higher level of concern about data security as more info is created, collected, and stored online which allows for the possibility of hacking.

As these developments proceed, the role of finance becomes more important and extensive. Many companies are turning to service providers to help them make the transformation. This may entail consulting services, augmenting current staff or even outsourcing the financial and accounting function.


Why startups need Finance and Accounting Outsourcing

Why startups need Finance and Accounting Outsourcing

Are you a startup and are considering hiring accounting and finance personal?

Having the right finance and accounting policy, procedures and technology in place could be critical to your success.  Lots of startups outsource many of the tasks not related to your company’s core competency, including accounting & finance.  Should you invest the money in hiring FTEs and purchase software or use an outsourced firm?  Let’s look at four ways hiring an outsourced firm can help your startup business.

  1. Select the right accounting package.

Too many startup businesses purchase off the shelf accounting packages that do not provide proper visibility into their business.  As a result, they either spend a lot of time with Excel spreadsheets to try and gain necessary information or they simply neglect items that inhibit growth and put the business at risk.

With the proper technology you have visibility into your business from anywhere, enabling you to spevd more time on the business instead of in the business.

  1. Help with investment capital.

Whether you’re applying for a business loan or seeking outside funding from angel investors or venture capital firms, accurate and up-to-date financials are essential.

Professional services firms will provide you with the up-to-date financial statements, along with explanations of the data in those financial statements, which can help your company standout amidst all those other businesses.

Be audit, partner and/or investor ready from day one.

  1. Trusted advice.

CFO guidance including advice, counsel and insight — providing you with financial statements, budgets, forecasts and dashboards to monitor all your financial data. It’s one thing to have all the financial data you need to run your business. But the real benefit is to have someone to explain exactly what the financial statements mean, and help you to make the decisions that will steer your company toward growth.

4 . Scale with your company.

With outsourced services your variable cost become a scalable fixed cost.  Why add non-revenue generating cost when you can gain resources, technology, quality and support all tailored to your needs? When your company grows the outsourced services company grows with you.

Lavoie CPA provides accounting & finance, technology and human resources support all as a service.

 

Accounting the Key Strategic Advantage?

Accounting the Key Strategic Advantage?

Most companies that are thriving view accounting as a strategic function. Companies relying on bookkeeping have a hard time keeping up in today’s changing climate.   Bookkeeping by itself does not provide opportunities.  In a fiercely competitive work environment, companies that properly manage finance can grow and protect themselves from risk.

The opportunities are exciting for the future but it also comes with lots of challenges.  Too many companies are stuck looking into the past because of lack of expertise and or technology.  It is important to understand the past, but essential to have the knowledge and tools to be able to see in real-time and make educated predictions into the future.  As companies grow, hiring and retaining qualified employees can be a difficult task with lots of uncertainty.

A growing number are relying on Accounting as a Service (AaaS) to gain a competitive advantage. AaaS combines tactical and strategic accounting and includes leading software.

Top 3 benefits of Accounting as a Service:

  • Focus on Core
    • Concentrate on growing the business
    • Efficiency gains
    • Eliminate staff turnover complexities
    • Ability to scale as you grow
  • Professional Expertise
    • Qualified controlled/CFO leading accounting and finance department
    • Improve cash flow
    • Reduce financial risk
    • Audit ready at all times
  • Technology
    • Real-time visibility into your business performance
    • Increased security
    • Reduced IT headaches
    • Integration with other applications to eliminate information silos

Forward thinking companies put themselves a head of the curve.  Interested in learning more about Accounting as a Service?   Contact us.

5 Myths around Outsourcing Finance Functions

5 Myths around Outsourcing Finance Functions

Outsourced Accounting or Accounting as a Service (AaaS) provider can be the catalyst to take your organization to the next level.  For some SMBs, accounting is not looked at as a strategic function of the organization, but it should be.  It also shouldn’t take focus away from growing your core business.  Lots of SMBs don’t consider Outsourcing.  Here are 5 main reasons why.

1) They think it is too expensive

By using Accounting as a Service, you have access to shared service center.  Providers have put a lot of investment, thought, and execution into their model and have staffed accordingly.  With an AaaS provider you now have access to a full accounting department that often is less expensive than one full-time FTE.  This doesn’t even figure in technology costs that come with the service.

2) It is the same as bookkeeping services

Bookkeepers are responsible for recording daily financial transactions.  Controllers are responsible for financial reporting, internal audit and internal controls. CFO are responsible for financial planning, financial data analysis and strategic planning.  By relying only upon a bookkeeper you are stuck looking in the past and cannot see into the future to effectively make critical decisions for your business.  AaaS providers ensure daily transactions are done correctly but also greatly reduce risks and provide necessary forward-thinking strategy to help growth your business.

3) We can just do the same in-house

For most SMBs it is hard to justify the expense of having a bookkeeper, controller, VP of finance and CFO.  All positions have importance.  You don’t want to pay a senior level person to do daily transactions and you definitely don’t want to ask an entry level person to manage financial risks.

4) We cannot have any finance staff in-house

Often AaaS providers work with internal staff to fill voids.  Yes, providers can function as the entire finance department but often work with existing staff to help maximize their production.

5) We have more control and stability by utilizing in-house staff

Employees turnover and training are always on the minds of companies.  If you don’t have a defined professional develop plan for each employee, you are at risk of losing your top talent to other opportunities.  By using an AaaS provider you eliminate the risk of employee turnover.  You also will not miss a beat when people people are out sick, on vacation, or on leave.

What do I get with an AaaS?

  • Enterprise software platform (workflow, automation, dashboards etc)
  • Vendors paid on-time
  • Customers billed on-time and accurately
  • Employee expenses captured and reimbursed
  • Cash transactions reconciled
  • Timely payables collection
  • Accounts analyzed and reconciled on an ongoing basis
  • Financial and management reports delivered on-time and accurately
  • Scalability and rapid deployment, when needed
  • Regulatory compliance delivered
  • Audit ready
  • A finance and accounting function that is STRATEGIC
How to Improve Your FP&A Process Right Now

How to Improve Your FP&A Process Right Now

FP&A Teams Have the Wrong Focus

According to a recent report by Adaptive Insights, CFOs want their employees to spend less time on collecting and preparing data and more time on forecasting and analysis. The survey revealed that financial planning and analysis (FP&A) teams are currently spending 53% of their time on reporting and data gathering alone.

“Reporting, whether it’s on actuals or forecast or planning should be quick. We shouldn’t be spending a lot of time on that,” says Jim Johnson, CFO of Adaptive Insights. “We should be spending much more time on the model that’s supporting it. The predictive analysis, the key performance indicators and the stuff that is really important for the company.”

There is a good reason why employees should spend more time on analytics. Oracle found that businesses who were effective at integrating financial and operating data, using analytics in processes and utilizing predictive analytics outranked their peers by 70% on profit and revenue.

How Can You Improve Your FP&A Process?

 

Implement a Dynamic Planning Process

First of all, your business need to incorporate a FP&A process that allow for flexibility. Rolling forecasts, for example, is one way to ensure you are adapting to market forces. Since rolling forecasts ultimately is an approach where you add or drop data on a rolling basis, you consequently have real-time insights to your performance against your predictions. APQC reported that an organization can save a median of 25 days on the annual budgeting cycle by using rolling forecasts.

“It makes no sense to use a 19th-century tool to manage 21st-century company in a volatile global economy,” argues Steve Player, a program director at the Beyond Budgeting Roundtable. “In the old days, the CFO sat in the back of the ship recording what happened. Now, the CFO stands on the bridge looking forward and adjusting for variables.”

Traditional annual budgets have limits. They often take too long to prepare, and when completed the data is already out of date. Rolling forecasts offer continuous updates to your data and a longer horizon with data up to 12-18 months ahead. Thus, you have much more accurate data and reliable insights. This, as a result, allows you to take more strategic decisions about your business.

 

Related: How to Improve Your Sales Forecast Accuracy

 

Make it Easy for Employees to Collaborate

Collaboration among employees and management is crucial for your business. First, they help you realize your goals, but they can also aid in reducing hidden costs. According to research by CEB, hidden budgeting and forecasting costs may prevent companies from realizing their full potential of investments in FP&A improvements.

How do businesses encourage collaboration? There’s one simple answer. Leverage technology.  Cloud-based software is a great solution for companies that have data that needs to be shared and aggregated by more than one employee. In addition, cloud software also allows for employees to access the same data from virtually anywhere. Finally, most cloud-based software providers offers integration with other enterprise systems, which allows you to have one source for your performance management.

 

Related: A Beginner’s Guide to Cloud Computing

 

Conclusion

While you may think your business is doing well enough, your competitors are advancing by implementing better FP&A processes like the ones discussed above. Don’t wait, instead, invest in FP&A processes that will help your business achieve outstanding results and reduce hidden costs.

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Financial controllers are increasingly taking on the role of financial operating officer. You’re ensuring that finance runs smoothly and that there are not surprises on audit day.

But what does “running smoothly” really mean?

Download this eBook to learn six ways that today’s best-in-class controllers follow to successfully meet and overcome challenges in the profession.

7 Ways Technology Helps Your Nonprofit Grow

7 Ways Technology Helps Your Nonprofit Grow

There are over 1.5 million nonprofits in the United States, including public charities, private foundations, and other types of nonprofit organizations such as chambers of commerce. According to a report by PNP Staffing Group, the nonprofit sector has grown 20% in the last 10 years, compared to the for-profit sector, which had a growth rate of 2-3%. As the nonprofit sector continues to grow in size – organizations face challenges in many areas.

But, rather than being fearful of the challenges that growth may bring, nonprofits should be optimistic. One of the simplest solutions to the challenges that nonprofits are facing is to implement innovative technologies. Below are just seven ways that technology may help your nonprofit grow and overcome challenges.

1. Visibility

Technology has allowed nonprofits to gain visibility, both externally and internally. Social media channels allow nonprofit organizations to share their important work with the world and gain external visibility. Additionally, technology such as software-as-service (SaaS) gives nonprofits visibility to internal operations and the financial state of the organization. Visual dashboards have grown in popularity and there’s a good reason for it – they provide the most important metrics to you and your organization.

Related: Visibility: You Need Eyes in the Back of Your Head

2. Grant Management

Nonprofits heavily rely on grants to operate; in 2013, public charities reported that 21% of their revenue came from government grants. While all the administrative tasks that are required to manage the grant process doesn’t require you to use software, it certainly helps. SaaS providers now offers specific functionality that allows your nonprofit organization to renew, manage or invoice funders as it relates to grants.

Related: 4 Reasons Why Nonprofits Should Consider SaaS

3. Remote Access

A survey released by Gallup earlier this year found that 43% of Americans spend at least some time working remotely. This number was a 4% increase since 2012, and the trend doesn’t seem to be going away. Remote work requires that employees can access the work anytime and anywhere. One of the most common solutions to this is implementing cloud software. Providers now offer a range of different services, such as accounting, expense reporting, analytics, CRM, CPM etc.

4. Fundraising

According to a report by Charity Dynamics in 2015, 88% of nonprofit professional believe that digital fundraising is going to grow from 7% to 20% in the next decade. Digital solutions can also gather data and summarize in visual dashboards to gain insights for strategic decision making.

5. ePayments/Billing

Bill.com recently published the results to their survey, which revealed that Millennials (the largest cohort in the US workforce) no longer expects paperless billing  – they believe it is the norm. Depending on the size of your organization, you can either team up with providers that specifically focuses on ePayments and billing or incorporate it in a larger Enterprise Resource Planning (ERP) solution.

6. Scale

Technology has disrupted the software business where providers now offer cloud solutions with pay-as-you-go subscription payment models. Thus, nonprofit organizations who are interested in scaling with their demand can easily do so by simply adding or upgrading their software service package without having to pay additional setup costs.


Do you see any other ways that technology would help your nonprofit grow?