Robert Kugel's Analyst Perspectives

Using Continuous Accounting to Improve Performance

Posted by Robert Kugel on Apr 26, 2023 3:00:00 AM

In 2015, I began using the term continuous accounting to call attention to technology advances that enable finance and accounting departments to improve performance. These advances have continued, making an even more compelling case for adoption of continuous accounting.

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Topics: Office of Finance, ERP and Continuous Accounting, digital finance, Purchasing/Sourcing/Payments, Consolidate/Close/Report

Reasons Your Midsize Organization Needs a Finance Technology Update

Posted by Robert Kugel on Apr 5, 2023 3:00:00 AM

The chief financial officer of a midsize organization faces a different set of challenges than those in larger or smaller enterprises. These organizations have grown to the point of requiring capabilities similar to larger businesses, but typically lack the staff or financial resources afforded to bigger organizations. The past decade of IT innovation – especially the expansion of cloud computing – has brought substantial benefits to midsize finance and accounting operations. Rapidly growing midsize organizations in particular should make investments in information technology that allow the business to scale without having to increase administrative head count, and focus resources on areas that accelerate growth, such as sales, logistics, R&D or customer support.

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Topics: Office of Finance, Business Planning, ERP and Continuous Accounting, digital finance, Consolidate/Close/Report

Now with the Miracle Ingredient AI!

Posted by Robert Kugel on Mar 30, 2023 3:00:00 AM

Early last December, just before ChatGPT became the new, bright, shiny object, The Economist magazine ran a story proclaiming that we had finally arrived at the age of boring artificial intelligence (AI). From my perspective, it’s unfortunate that didn’t last and that AI has been relegated back to the buzzword league. AI will be an increasingly important feature of business software through the end of this decade. Ventana Research asserts that by 2026, almost all vendors of software designed for finance organizations will have incorporated some AI capabilities to reduce workloads and improve performance. The same observation applies, to some significant degree, to other parts of an enterprise, so it’s important for people in operational roles to understand what AI can and cannot do. It’s also important for vendors to clearly and concretely communicate what they mean when they say, “AI-enabled.” Moreover, I prefer the alternative term “augmented intelligence” because it emphasizes that these systems enhance — rather than replace — the capabilities of the humans employing them, especially through improved decision-making and by eliminating the need to perform repetitive work.

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Topics: Office of Finance, Business Intelligence, Business Planning, Enterprise Resource Planning, ERP and Continuous Accounting, natural language processing, AI and Machine Learning, continuous supply chain, digital finance, Purchasing/Sourcing/Payments, Consolidate/Close/Report

Accounts Payable Automation is More Valuable Than You Think

Posted by Robert Kugel on Mar 10, 2023 3:00:00 AM

We added purchasing, sourcing and payments to our core Office of Finance focus areas this year to reflect new and important opportunities to use technology to gain effectiveness through greater efficiency. Doing a better job of record-keeping and organizing paperwork – especially in a minutiae-laden process like source-to-pay – may seem trivial. Yet digitally transforming core business processes became essential as the pandemic required organizations to lock down in early 2020, and the need to operate remotely presented a new set of challenges best addressed by software. Moreover, accounts payable work can be done remotely, and organizations that go this route find that digitizing the process works best.

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Topics: Office of Finance, ERP and Continuous Accounting, Purchasing/Sourcing/Payments

Cloud ERP is the Path Forward for Manufacturing and Product Companies

Posted by Robert Kugel on Feb 22, 2023 3:00:00 AM

The cloud has come to dominate many business software categories, but until recently, enterprise resource planning for manufacturing and product-focused organizations has been a notable laggard. Cloud-based systems can be less costly to operate, perform better, be more secure and shift maintenance and update chores from the IT department to the vendor, freeing IT teams to concentrate on more strategic needs.

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Topics: Office of Finance, Operations & Supply Chain, Enterprise Resource Planning, ERP and Continuous Accounting, continuous supply chain, digital finance

insightsoftware Enables a Predictive and Effective Finance Department

Posted by Robert Kugel on Feb 14, 2023 3:00:00 AM

insightsoftware provides applications for finance departments and other business users in midsize and larger organizations, offering a broad range of functions including analysis, internal and regulatory reporting, planning, consolidation, tax provision and treasury. The software brings together applications that enable business users to maximize data collected in existing systems and streamline the performance of a range of office of finance functions, all while limiting or eliminating the involvement of IT professionals.

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Topics: Office of Finance, embedded analytics, Business Intelligence, Business Planning, Financial Performance Management, ERP and Continuous Accounting, digital finance, profitability management, Revenue, Lease and Tax Accounting

Trintech Streamlines a Transformed Record-to-Report

Posted by Robert Kugel on Feb 9, 2023 3:00:00 AM

Trintech provides finance departments in midsize and larger organizations with software to accelerate their accounting close processes. This record-to-report (R2R) cycle is complex because it involves the coordination of numerous people, many systems and multiple sources of data. There are iterative portions that involve cycles of reviews and multiple levels of approvals. These include reconciliations and adjusting of entries during the close as well as authoring, editing and updating narratives in the creation of disclosure documents. All of these must adhere to internal controls that require defined processes including reviews and approvals by multiple individuals. One key objective within the R2R process is to minimize the time it takes to complete the accounting close, with the generally accepted norm being one business week. Shortening the close means that all downstream tasks can be finished sooner, providing executives, managers, directors and shareholders with information about the organization’s financial performance and health sooner. Ventana Research asserts that by 2026, two-thirds of finance and accounting departments will improve their use of readily available technology to close their quarterly books within six business days, up from one-half that can do it today.

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

Intercompany Financial Management for Accountability and Accounting

Posted by Robert Kugel on Feb 7, 2023 3:00:00 AM

Ventana Research coined the term intercompany financial management (IFM) to define a discipline for structuring and handling transactions within a corporation and between its legal entities designed to maximize staff efficiency and accounting accuracy while optimizing tax exposure, minimizing tax leakage and ensuring consistent tax and regulatory compliance. Technology has advanced to a point where this approach is feasible and cost effective. For that reason, Ventana Research asserts that by 2026, one-half of organizations with 10,000 or more employees will have implemented IFM to achieve tax, risk management and accelerated financial close benefits.

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Topics: Office of Finance, ERP and Continuous Accounting, digital finance

FinancialForce Sharpens Customer Focus in Services Businesses

Posted by Robert Kugel on Jan 31, 2023 3:00:00 AM

FinancialForce offers cloud-based ERP and professional services automation (PSA) software. The company targets midsize and larger services companies, especially those that provide professional services (such as consultants or field service organizations) as well as those that offer subscription-based or recurring revenue services and products. FinancialForce’s key point of differentiation is that it is built natively on the Salesforce platform, ensuring that CRM data is already located on the same platform as accounting and back-office data so organizations can orchestrate end-to-end, front-office to back-office processes without having to integrate different systems.

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Topics: Office of Finance, Business Planning, Digital Commerce, ERP and Continuous Accounting, Subscription Management, digital finance, Revenue Management, Revenue, Lease and Tax Accounting

Optimizing Subscription Management for Finance and Accounting

Posted by Robert Kugel on Jan 24, 2023 3:00:00 AM

The subscription and recurring revenue business models became a significant part of the economy this century with the advent of streaming services for entertainment and software as a service. They have grown in popularity because they enhance customer lifetime value by evolving what had previously been a one-time-sale relationship into a delivery of ongoing services which can create a more loyal customer relationship as well as provide a regular, more predictable revenue stream. I recommend that corporations that have adopted or are planning to adopt either of these business models take a continuous accounting approach to managing their record keeping. Ventana Research asserts that by 2026, one-half of subscription organizations will use continuous accounting to remove constraints limiting sales and marketing flexibility, streamline back-office processes, shorten the accounting close and improve customer satisfaction.

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