Why F&A Can Be Your Organization’s Secret Weapon

What do you think of when you think of the F&A department? People issuing invoices, reconciling journals or creating a monthly financial statement? Yes, it’s that, but F&A has the potential to be a lot more.

One of the current trends in office design is to create open spaces of cross-functional teams. Designers are looking to see how the physical workplace can be a better partner to employees by fostering collaboration, teamwork, new ideas and new ways of working. They are looking to draw from all areas of the company in order to drive strategy and find new opportunities.

A Big-Picture View

In many ways the F&A department can be seen as an analogy to this same concept. How? Finance gathers financial and non-financial data from all disparate departments and lines of business—from operations, marketing, HR, R&D, etc. As a repository of information, finance is in the unique position of having a window to every aspect of the company.

The finance organization can therefore be a powerful agent of organizational change. It can leverage the information that it collects to assist executives and business managers to optimize processes, achieve goals, avert problems, and make decisions. In short, F&A can be a valuable partner to other departments in the company. Continue reading

The New F&A Essential: Skilled Talent

No matter where you look, it’s getting increasingly difficult to find F&A help that has the right mix of abilities. Between the shrinking unemployment rate and a growing demand for talents that far exceed traditional finance skills, companies are continually at a loss to find qualified personnel.

Yet people are an essential component to success in any industry. Businesses require the right staff in place to ensure high-level performance and optimal customer satisfaction. So, what are companies to do when they’re unable to find or retain the high-value workers they need?

The talent war is one of the most pervasive risks organizations face. In survey after survey, executives report having succession challenges and difficulty attracting and retaining top talent.

And it just might get a little harder in 2017. According to the latest Salary Guide for Accounting and Finance from staffing agency Robert Half, salary levels are expected to rise by an average of 3.7% in 2017. It’s a new reality that finance leaders have become all too familiar with: when it comes to modern-day F&A, the power lies with the prospective hire.

Skilled professionals are in high demand and short supply, and employers have no choice but to negotiate competitive compensation packages. Today’s professionals don’t need to ride out long hiring processes; with multiple offers on the table, they’ll opt for the one that is most engaging and financially rewarding. Continue reading

7 Signs of You Have an Accounts Receivable Problem

accounts receivableEvery year, companies around the world write off millions of dollars of both B2C and B2B bad debt. But in these tough economic times, ensuring cash flow and an optimized Account Receivable (AR) process is the lifeline of any business. Getting paid on time is key—and when you don’t, then getting AR right is more important than ever.

If you see any of these signs in your Accounts Receivable department, there just may be a problem that needs addressing:

  1. Your DSO is High or Constantly in Flux: Days Sales Outstanding (DSO) is the bellwether metric for any AR organization. When it is high, that means you are probably in the habit of extending credit to clients, which is a risk. Also, high DSO negatively impacts cash flow. If it continues to creep up, there is less of a chance you will eventually collect on those overdue accounts.

Continue reading

Reporting: What CFOs Tell Us

600px-shutterstock_129137816As CFOs take on ever-expanding roles and responsibilities, perhaps no area presents more challenges and opportunities for improvement than financial reporting.

Today’s organizations rely on an accurate, efficient financial reporting function. However, in an increasingly complex, hyper-speed world, CFOs and their C-suite peers are questioning whether or not the financial reporting methods of the past are adequate enough to take their organization into the future.

The Reporting Environment Has Changed

There is an increasing volume and pace of data that finance execs fear is significantly impacting the effectiveness of reporting. As well, the organizational environment intensified in complexity, as organizations add more legal entities, business units (often spread around the world) and reporting systems. Continue reading

7 Signs Your Accounts Payable Isn’t Optimized

TemplateAccounts Payable (AP) is an important factor in a company’s working capital, and a key indicator of overall operational effectiveness. If you see any of these signs, there’s a strong possibility your AP organization and its policies and processes need a second look.

1. Late Payments to Vendors

Did you know that best-in-class companies have a 90% capture rate for early payment discounts? If there are inconsistent AP practices in your organization, there’s a good chances that invoice processing is taking longer than it should. The real problem here lies not only in unhappy vendors but also in late payment penalties that are easily avoidable.

2. You Don’t Know Your Costs

According to research from the International Accounts Payable Professionals (IAPP) on the cost of invoice processing, 31% of AP professionals did not know their costs. That worrying number shows a lack of emphasis on the strategic value of AP cost control within their organizations. A best-in-class AP organization knows their costs per invoice processing transaction. Continue reading

On Home Turf: Sourcing Trends

Photo: Via Wikipedia

Photo: Via Wikipedia

A potent combination of new technologies combined with rising costs in traditionally lower-cost locations and a move toward domestic protectionism has had a direct — and positive — impact on onshore sourcing. That’s the word from a recent Everest post.

Everest points out that traditional service models grew by only 0.1 percent last year, while IT and business process services that were rooted in digital offerings are growing at a rate of 18 percent a year.

Digital Offerings

This echoes a sentiment throughout the analyst community. Horses for Sources has written extensively on the need to tap into a global resource to achieve desired outcomes, and notes that with the rise of digital and as-a-service offerings services become location-neutral. Location becomes a side issue as factors like access to automation, process transformation and alignment with digital business models/outcomes move to the forefront.

As automation becomes the great equalizer, F&A onshore locations are appealing for several reasons. There are a few key reasons: Firstly, there’s a desire for closer proximity to facilitate real-time communication and management; secondly, as business process delivery maturity continues to grow, companies are sourcing more complex tasks and need skilled talent; and lastly, the much discussed new technologies that can drive down costs once gained through labor savings.

The Skill Factor

Talent can be a key consideration. Companies want to ensure that the F&A talent working on their account have the skills and understanding of their industry and organization. The F&A market is maturing and with that maturity comes a need for higher value work, from treasury services to forecasting, planning and analysis. Due to the sensitive nature of this work, as well as compliance issues, companies may want to keep these functions onshore.

In a report from May 2015, Everest reviewed domestic US-based delivery locations, and the south has a clear advantage. By shifting work away from a Tier 1 city, like New York, to a lower cost Tier 2 or Tier 3 city, companies can cut costs anywhere between 15% and 30%, while still drawing a highly skilled human resources.

Locations like our Deloitte-heritage F&A Controllership & Management Center in Tulsa, OK, are optimal for highly complex end-to-end F&A work.  For example, our Tulsa location features a depth of talent, including CPAs, MBAs and Six Sigma experts amongst its staff members.

Located in the Central time makes it highly convenient for real-time communications from both the east and west coasts—and helps companies avoid extensive travel times (and costs) for site visits.

More importantly, our consistent delivery practices, policies and strong internal control structure gave clients the stringent, accurate financial, investor and tax reporting they are looking for.

To learn more about how Sutherland can help improve your F&A function, and to arrange an assessment of your current practices and processes with one of our finance experts, schedule an appointment today.

 

transformation-roadmap

Automation’s Impact on the Insurance Industry

600px-shutterstock_140576308Businesses across a variety of industries are embracing intelligent automation tools to remove manual business processes and streamline functions.

Technology like Robotic Process Automation (RPA) can perform routine and mundane tasks more quickly, more inexpensively and more accurately than human counterparts.

For insurers, RPA has the potential to simplify many back-office processes, including claims management, credentialing and invoicing. Claims administration and credentialing are very specialized functions. Unfortunately, cumbersome manual processes can have a negative downstream effect on claims processing. So there is intense pressure on internal resources to resolve credentialing issues and ensure that claims are processed as quickly as possible.

In face, just last month Everest Group reported that key drivers for RPA adoption in P&C Insurance center around operational optimization and cost reduction, both listed as +4 on a scale of 1 to 5, with 1 being low and 5 being high.

RPA Acceleration

RPA has been “the latest thing” for years now. You would think that insurance companies would have rolled out RPA programs to help reduce paperwork, rekeying of information and to drive the operational optimization and cost reductions they are looking for. Continue reading

Transform or Be Left Behind

You’ve no doubt heard the famous Tom Goodwin quote, or a riff on it:

“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”

It seems that every company wants to be “the Uber of X [insert industry here].” These digital disruptors are today’s cool kids, to be copied and envied.

Yet, for many enterprise-level—often highly traditional—global organizations laden with various levels of bureaucracy and clinging to entrenched operating models and processes, achieving this goal is a near impossibility.

Traditional (think insurance companies, banks, mortgage firms, etc.) businesses are placing customer experience and transformation high on their strategic agenda. However, they seem to be at a distinct disadvantage when compared to newer, highly nimble, technology-based competitors. If they fail to innovate and evolve, there is the risk of being left behind, as their market share is stolen out from underneath them. Continue reading

As Treasury Goes Virtual, Can Forecasting Keep Up?

money-forecastingAs businesses continue to expand their global footprint, and new technology changes the way we work, the success of the treasury department is contingent on how well it operates in an increasingly virtual setting.

That’s the latest from PwC’s Global Corporate Treasury Benchmarking Survey 2017, which captures the views of over 220 treasurers and Chief Financial Officers (CFOs) from around the world.

With a full two-thirds of people involved in treasury processes are no longer reporting directly —or even indirectly—to the treasurer, the function is no longer a “department” but rather a process. In fact, many treasurers are handing over more treasury tasks to third-party providers or internal shared services.

In a statement, Sebastian di Paola, Global Corporate Treasury Leader at PwC, said, “Treasury is becoming increasingly virtual and treasurers need to be jacks of all trades by collaborating more with the business, shared services and banks and raising their game in IT security, valuation and financial risk management.”

Top of the Agenda

The solution, says di Paolo, is a strategy that takes a consultative approach, integrates other business processes and is heavy on automation. Treasurers are being asked to step up and become stewards of liquidity and better cash flow management.

A top priority for both CFOs and treasurers is cash flow forecasting, with 42% ranking it as a priority and 80% of these people rank it as high or of critical importance.

Yet, as the report points out, forecasting has been ranked as a priority for the past two decades, and in the 2017 report, over half of respondents cite concerns like accuracy of data, data collection, mapping and proper tooling. Despite huge technological advances, treasury is still a manual, spreadsheet based function. Plus ça change, plus c’est la même chose, it seems.

For treasurers to truly attain better cash flow forecasting and reporting, they must first embrace digitalization, process transformation and predictive analytics. The report points to the importance of attaching KPIs to data accuracy. (Be sure to download the full report here.)

Our Experience

Sutherland has helped many clients contain costs and improve cash management. Finance executives know what has to be done, but internal teams have limited resources for overcoming the obstacles of a lack of centralization and visibility. They struggle with getting real-time information and actionable data.

Optimizing cash management is essential to business success. If you’d like more information on how Sutherland can help you improve cash flow management and significantly reduce your costs, please schedule an appointment today for a deeper conversation with one of our experts.

transformation-roadmap

Are My Processes Best-in-Class?

Companies that are serious about improving performance and staying ahead of their competition in these volatile and changing times are constantly searching for better ways of doing things. From customer-facing functions like customer support to the behind-the-scenes finance function, best-in-class practices and processes are the hallmark of an industry leader.

High-performing enterprises embrace a culture of continuous process optimization and improvement. It’s not an option, but rather a necessity. As technology changes and continues to disrupt business, what was relevant five years ago seems as old as the dinosaurs now. C-suite executives understand that without top-performing processes they may soon find themselves out of step with their market, regulatory compliance and quickly falling to the back of the pack.

How Do You Know?

But how do you know if your processes are best in class? How do you know if you are measuring the right KPIs? Where do you stand compared to your competitors? Can you get money through the door and into the bank more quickly, or are you lagging behind the industry norms? Continue reading