Driving on sight instead of navigating in the fog
Who doesn't know this - the regular stress at the end of the month when it comes to realizing the monthly, quarterly or annual financial statements. In accounting, all activities at this time are focused on collecting, merging and reconciling data, and a lot of time is spent reconciling bank accounts and clearing open items.
The multitude of manual processes creates a complexity that is hard to keep track of. Consequently, the risk of errors increases - and this at a time when correct results are of central importance.
But no matter how hard accountants try, they often feel they don't really know about every relevant detail, rather than driving by sight. A recent survey by Censuswide also proves this.
According to the study, only 38 percent of the financial experts surveyed worldwide trust the financial data they have compiled. Nevertheless, many seem to have already become accustomed to the lack of overview and transparency.
Crowding-out effects can also be observed, for how else could it be explained that 71 percent of CFOs in the survey said they trusted the accuracy of their figures?
But it's no use closing your eyes. This is not the way to master the challenges of an increasingly complex competitive environment.
In doing so, it is basically not difficult to break away from manual accounting processes and embrace modern software solutions. Today, there are already many elegant ways to automate the complex month-end closing process and thus ensure transparency and foresight. You just have to want to do it.
Those who dare to consistently standardize their company's financial statement process and digitize it in the next step create the basis for a modern and, above all, more valid financial statement.
Continuous Accounting is the magic word. This is an automated process that breaks down the large number of tasks required for the financial statements into small task packages, standardizes them and distributes them throughout the month so that the financial statements can be continuously closed.
Continuous Accounting eliminates the need for time-consuming manual reconciliations by combining data from different source systems and defining clear rules for automated further processing.
This provides relief for the accountants at the end of the month and reduces the risk of errors. Hours of diligence in reconciling open items have come to an end.
The most sustainable added value of Continuous Accounting, however, is that it raises data quality to a much higher level from the start, making it possible to perform meaningful data analysis on a daily basis - virtually in real time.
This is because defining strict rules for handling data and automating processes across systems creates transparency that significantly simplifies the performance of plausibility checks and thus also greatly reduces the number of data that still require separate consideration at the end of the month - an effect that also has a positive impact on a company's audit security.
Valid figures are the be-all and end-all of any company, because they ensure planning and investment security. This plays a particularly important role on the capital market, where anyone who is embarrassed by having to correct figures that have already been published quickly suffers a loss of confidence.
Especially in light of the fact that there were as many profit warnings last year as there have been since before the financial crisis and that more and more listed companies have to publish profit or revenue warnings, the introduction of Continuous Accounting is the best thing a company can do.
