Are you prepared for more growth and profitability? Part 5

For our last article on questions to ask your Controller we dive into the changing role they play.

Q5 – Can we integrate our financial information and our operating metrics?

In the past, a business needed an accounting staff to compile the financial data for the business. Then they would hire a separate group of FP&A individuals who were responsible for pulling together operating metrics. These two groups would then create a financial package that as CFO you hoped would give you a clear picture of where you were in the past, where your business is today and model versions of where you could be tomorrow. As software systems grow and become more robust it has opened up more opportunity for faster and more thorough analysis of the data all in one place. With the growth and expanding ability of financial systems you can now get analysis from your financial system with regards to operating metrics. They don’t just churn out financial statements but now give you a higher level of analysis needed for future growth and profitability. Due to this integration the Controller now has the reins to control and manage this side of the business as well.

Ways that this merging of data will enhance your business:

Identifying opportunities. 

With all of the data readily available for the Controller, they will be able to spot opportunities for revenue growth and expense reductions faster and easier.

Emphasis on operating metrics. 

With the Controller having access to non-financial data such as shipments, returns, delivery performance and more they can now collaborate with other department managers to increase performance in all areas of the business.

Having a single source for the financial truth of the business. 

With one system managing all aspects of the financial information there is no need for reconciling differences between two or more systems. Untangling conflicting data has been a time-consuming task of the past.

Key takeaway: Implement a single reporting system to eliminate unproductive reconciliation time.

You may gawk at the cost of implementing a new all-inclusive system but by removing the cost of multiple systems plus the cost of all of the reconciliations that are now being done. You will come out ahead not only financially but also with a higher level of confidence in the data you now have.

Recap of questions:

How many manual entries are you making? Automation and clear concise policies with help fix this.

Have you reviewed your compliance? As you grow into new areas you need to have a plan to review all the requirements, especially tax.

How long does it take to close your books? Automation, staff knowledge and flash reports will speed this up.

Are you still using Excel? Make sure Excel isn’t just a crutch but is used for isolated or ad hoc situations and not as a full-on financial reporting tool.

I hope these questions have sparked some ideas on where you can work to improve your potential for growth and profitability in the future.

Wishing you a prosperous and abundant 2021!!