This is Blog #3 in our Record to Report Blog Series. You can find the complete series outlined HERE.
Last week we dove a bit deeper into some of the details of the R2R process. This week let's take a step back and think about the process as a whole.
Why did the accountant cross the road?
Because that’s what she did last year.
“We’ve always done it this way” is a common phrase in the accounting department. The R2R process is repeated period over period and historically has been very groundhog day-esk. We do the same thing period over period. However, 2020, certainly threw a wrench into that paradigm.
All of a sudden, the record to report process needed to be done remotely. The financial close process is not a “wish list” process. It’s something that is mandatory, not only for regulatory reasons delegated by the government of every country but also for private companies, by the owners. Financial reporting and the delivery of financial information is essential to the operation of any organization. So when we all started working from home there was not an option to say “Hey, let’s not close the books this period.”
We were now forced to move this process remotely and change management needed to be addressed. The process of closing the books needed to be reworked. However, many processes were not actually improved or changed they just did the same thing they always did, but remotely.
Your business produces financial reports, and it “works”—so why fix what ain’t broke?
Well the thing is, the attitude that “if we did it last year, let’s just do it again, and now we’re good” IS what’s broke. When an organization finds itself taking that approach, then THAT is when it needs to understand and embrace how to improve the R2R process as a whole. You need to leverage people, processes and technology. Wherever you can automate, standardize, or centralize a closing process is a potential for improvement. Technology continues to enable this, year after year.
You need to move beyond closing the books every month to asking, Is it efficient? And then, you need to ask, How can we change what we’re doing now to adopt the technology that exists to enable continuous accounting?
Think about that for a moment. This blog series is designed to parse out the different steps in the R2R process. The technology is there NOW. Your processes are based on historical processes based on traditional technologies. You need to think about how people in your accounting and financial close departments, your exceptional accountants (perhaps you), can transform the processes that happen at the end of a period.
What are you doing now because you’ve “always done it that way?” What reports are being created today because ‘Mary’ said she needed it—ten years ago? Does your organization still need that? If it does, are there more self-service tools that you can utilize to get Mary’s information out to the organization?
Let’s not just cross the road because ‘Mary’ did it last year (or the year before that, or the year before that!).
Instead, think about how you can transform your accounting and close processes and how you can impact transformation. Our blog series dissects the record to report process and will give you the information you need to begin your transformation.
And just for fun, here are some other answers to the question "Why did the accountant cross the road?" from a BlackLine conference a few years back.