Robert Kugel's Analyst Perspectives

Controllers: Always Be Closing

Posted by Robert Kugel on Jun 29, 2021 3:00:00 AM

These days it strikes me that the motto of successful salespeople – "ABC: Always Be Closing!" – should apply equally to corporate controllers, albeit in the accounting sense. This is a reference to an approach to managing the finance department that I have been advocating, which I call "continuous accounting." It is a holistic way of managing the accounting function that, in large part, emphasizes using technology to distribute workloads more evenly over an accounting period, spreading closing activities as evenly as possible over time rather than waiting until the end of the month or quarter. Continuous accounting also stresses improving staff efficiency by automating repetitive processes as well as enhancing organizational effectiveness by improving data integrity in finance processes.

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Topics: Office of Finance, Business Planning, Financial Performance Management, ERP and Continuous Accounting, robotic finance

Digital Process Reengineering Improves Business Performance

Posted by Robert Kugel on May 28, 2021 3:00:00 AM

Business process reengineering (BPR) was a consulting fashion in the early 1990s that spurred many companies to purchase their first ERP systems. BPR proposes a fundamental redesign of core business processes to achieve substantial improvements in market and customer responsiveness, productivity, cycle times and quality. Those early ERP systems provided a platform to manage cross-functional business processes with much greater flexibility and efficiency than had been possible in the past, partly because it took advantage of the commercialization of relational database technology, the graphical user interface, client-server networks and event-driven programming. ERP and other digital systems support business process reengineering by guiding the step-by-step execution of the redesigned process to ensure that it is performed consistently. They also automate the handoffs between individuals and departments as well as manage approvals and exceptions to accelerate completion of that process and permit supervisory personnel to spend more time focusing on matters that require their judgement and experience and less time on administrivia.

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Topics: Office of Finance, Business Planning, Financial Performance Management, ERP and Continuous Accounting, Revenue, robotic finance, Predictive Planning, lease and tax accounting

Reduce Risk and Improve Departmental Effectiveness with Intercompany Financial Management

Posted by Robert Kugel on May 24, 2021 3:00:00 AM

Ventana Research defines intercompany financial management as a discipline for structuring and handling transactions within a corporation and between its legal entities. IFM is designed to maximize staff efficiency and accounting accuracy while optimizing tax exposure, minimizing tax leakage and ensuring consistent tax and regulatory compliance. Today, IFM is an obscure topic, but I assert that by 2025, one-half of organizations with 10,000 or more employees will have implemented intercompany financial management to achieve tax, risk-management and financial close benefits.

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Topics: Office of Finance, Business Planning, Financial Performance Management, ERP and Continuous Accounting, Revenue, robotic finance, lease and tax accounting

Integrated Business Planning Uses Zero-Based Budgeting to Improve Performance

Posted by Robert Kugel on May 21, 2021 3:00:00 AM

The objectives of zero-based budgeting are well aligned with what I call integrated business planning, a technology-enabled approach to managing the forward-looking activities of a corporation including forecasting, planning and budgeting. IBP enables every business unit to plan their business in a way that makes sense to them but also makes the numbers in those plans available for company-wide planning, budgeting analysis and reporting. IBP combines operational planning and financial budgeting using models constructed around the things that managers manage, translating those elements into a financial budget. This approach can compress the time required to create and update operating plans from days or weeks to hours or minutes. Our Next-Generation Business Planning Benchmark Research found that IBP is a superior approach.

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Topics: Office of Finance, Business Planning, Financial Performance Management, robotic finance, Predictive Planning

Unit4 Democratizes Agile, Data-Driven Decision-Making

Posted by Robert Kugel on May 17, 2021 3:00:00 AM

Unit4’s Financial Planning and Analysis (formerly Prevero) is a planning and budgeting application designed for the requirements of midsize corporations and the public sector. These organizations are challenged in buying software because they have almost all the requirements of larger enterprises but have a smaller budget and limited technical resources.

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Topics: Office of Finance, embedded analytics, Analytics, Business Intelligence, Business Planning, Financial Performance Management, Price and Revenue Management, Digital Technology, ERP and Continuous Accounting, AI and Machine Learning, collaborative computing

Consolidation Software Builds Staff Effectiveness in Midsize Companies

Posted by Robert Kugel on May 14, 2021 3:00:00 AM

Financial consolidation software assists companies in executing their accounting close process - especially those that use multiple ERP systems or have multiple legal entities - and with other characteristics that can complicate the process such as keeping books in multiple currencies. Not every midsize company needs consolidation software because many find their ERP (or financial management) software satisfies their needs. Our Office of Finance research finds that just 5% of midsize companies (which we define as those with 100-999 employees) use consolidation software to manage the process while 30% use their ERP system and another 51% use desktop spreadsheets either completely or to a significant degree. Using consolidation software can help shorten the close, especially when it substantially reduces the use of spreadsheets. Consolidation software supports the management discipline of continuous accounting.

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Topics: Financial Performance Management, ERP and Continuous Accounting

FourQ Builds Confidence and Trust in Intercompany Financial Management

Posted by Robert Kugel on Apr 23, 2021 3:00:00 AM

FourQ is an intercompany financial management (IFM) Solution-as-a-Service provider. IFM is a discipline for structuring and handling transactions within a corporation and between its legal entities, and is designed to maximize staff efficiency and accounting accuracy while optimizing tax exposure, minimizing tax leakage and ensuring consistent tax and regulatory compliance. Today, IFM is an obscure topic, but I assert that by 2025, one-half of organizations with 10,000 or more employees will have implemented intercompany financial management to achieve tax, risk management and financial close benefits. Here’s why:

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Topics: Office of Finance, Financial Performance Management, ERP and Continuous Accounting, Revenue, robotic finance, lease and tax accounting

Modern ERP Improves Organizational Performance

Posted by Robert Kugel on Apr 16, 2021 3:00:00 AM

The ERP system is at the core of nearly every organization’s record keeping and business process management. Its smooth and uninterrupted functioning is essential to an organization’s accounting and finance functions. In manufacturing and distribution, ERP manages inventory and logistics. Some organizations use it to handle human resources functions like tracking workers, payroll and related costs.

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Topics: Office of Finance, Financial Performance Management, ERP and Continuous Accounting, robotic finance

IBM Planning Analytics Makes Planning Easier for Business Unit Leaders

Posted by Robert Kugel on Apr 13, 2021 3:00:00 AM

IBM Planning Analytics, formerly known as TM1, is a comprehensive planning and analytics application designed to integrate and streamline an organization’s planning processes. It can support multiple planning use cases on a single platform, including financial, headcount, sales and demand planning. The software automates enterprise-wide data collection to make it repeatable and scalable across multiple users and departments. It supports sophisticated driver-based modeling that enables rapid what-if or scenario-based planning, while its built-in analytics provide deep business intelligence capabilities. This enables senior executives and managers to work interactively to immediately assess their current position and consider the impact of various options to address opportunities and issues rather than laboring through a lengthy process.

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Topics: Office of Finance, embedded analytics, Analytics, Business Intelligence, Collaboration, Business Planning, ERP and Continuous Accounting, Predictive Planning, AI and Machine Learning

Trintech Speeds up Financial Close with Automation

Posted by Robert Kugel on Apr 9, 2021 3:00:00 AM

Organizations have long sought ways to achieve a fast but “clean” (accurate) financial close. The most widely accepted benchmark is to be able to close within one business week. Organizations that close within a business week are almost always more competent in how they manage the process and therefore use resources more efficiently. Also, organizations that close their books within six days after the end of the quarter are more likely to provide executives with timely information and respond to markets and competitors with greater agility. While there have been some improvements in efficiency from modern accounting systems, our research shows that one-half of organizations still take more than a business week to complete their quarterly close.

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Topics: Office of Finance, Business Planning, ERP and Continuous Accounting, robotic finance