Be Prepared to Answer These 3 Questions from Your CEO
As your business grows, executive leadership will demand more and more from your finance and accounting departments. But it works the other way around, too: as your finance and accounting departments are able to deliver more and more to executive leadership, your business will grow.
The insights coming out of finance and accounting are supporting your increasingly strategic partnership with the CEO and other key decision makers. As your team evolves into this relationship, you’ll be called on to provide raw data, data assessments, and data projections that identify opportunities to make changes to the way business is run or jump on opportunities to make big strides forward. So what should you be ready to help the C-suite address?
- “What can you tell me today about our financial health tomorrow?”
CEOs need to keep their finger on the pulse of the business. They may want to measure that pulse by cash flow or profit—even if they don’t appreciate the difference between the two. Your team can help provide the visibility required to keep them abreast of historic transactions, real-time issues, and future possibilities so they have confidence in what’s ahead.
While they may be concerned with having sufficient funds to handle payroll or other overhead expenses, it’s more likely they want to know if now is the right time to make an investment in new equipment or an IT upgrade. If you haven’t established the key performance indicators (KPIs) for the business—and you don’t have a system for measuring and monitoring them—you probably don’t have a method for reporting on them, either. Now is the time to start having these conversations. Financials are important, of course, but it’s the KPIs that inform decisions.
If your finance and accounting system isn’t keeping up with your transaction volume and helping you stay up-to-date, your cash flow and profit projections are going to be loose estimates, at best. And that means you don’t have access to real-time data, or it’s difficult to obtain it and then report on it in a way that makes sense and is actionable for the decision-maker. It might be time to consider upgrading your system to a cloud financial application like Intacct.
- “Are we prepared to ‘pass’ an audit?”
As scary as it might be to answer this question, it’s also a difficult one to ask. What if your answer is, “We sure hope so?!” No CEO wants to hear that there could possibly be any oversights in your financial compliance. If they only knew how difficult it is to stay on top of documentation—dotting the I’s and crossing the T’s to run a squeaky-clean operation—when you rely on manual workflows. The spreadsheets you’re using may contain formula errors and miss some general ledger accounts, and the bigger they get, the harder they are to manage.
There’s no good excuse for oversight, but do you have the technology in place to ensure everything is accurate and audit-ready? Assuming you’re not fully confident in your (manual) system, it’s time to transition to a more streamlined workflow. Intacct offers these three tips:
- Be sure that your system automates, manages, and documents your revenue accounting treatment, with the ability to define separate revenue recognition schedules and rules for each individual contract and line item.
- Establish an auditable basis for assessing the value of receivables. Your system should track complete transaction details “forever” and maintain secure access to complete customer histories, allocating payments to the right invoices and periods.
- Rely on your accounting system to provide a full set of consolidating and eliminating journal entries so the auditor can see the details behind each entry.
- “Where should we invest our dollars?”
If you’re lucky enough to get this question from your CEO—and you need to update your finance and accounting system—go for it. You may have moved beyond Excel spreadsheets and have maxed-out the functionality of the desktop software you’ve been using. (Refer to 15 Signs You Have Outgrown QuickBooks.) Transitioning to a powerful, cloud-based financial management solution will transform virtually every finance and accounting function and enable your team to work more productively.
Your CEO will need to know How Cloud Accounting Saves You Money. They’ll also appreciate that investing in a solution like Intacct will make it easy to scale the business. Plus, it will enable you to work smarter, not harder—because you want to answer even more of their questions with more accurate and timely information and insights.
Learn more about upgrading to a cloud-based accounting software solution.