You walk into a crowded restaurant; the greeter guides you to an open table. Your server walks up and asks what you would like to order.
“I haven’t seen a menu yet,” you reply.
“Menus are not available right now,” says the server. He rattles off a few choices; you pick one that sounds best.
Right after you finish your plate, the server comes by and hands you a menu, saying “sorry this took so long!”
At that point, how helpful is that menu for you? What is the likelihood you look at it and realize you would have much preferred a different meal? Maybe a meal you would have enjoyed was half the price of the one you already ate. Maybe you see something that would have been much healthier. Or perhaps most likely, you don’t look at the menu at all.
In my experience working with clients, I see similar situations happen all the time in the business world.
The Need for Timely and Relevant Financial Information
Business leaders and managers have important decisions to make, but so often, financial statements and related information are not available until after those decisions must be made. If financials are not available when they are needed, what value are they really providing? How useful can they really be?
Many factors can contribute to a lack of timely information. Very common examples I see include outdated systems and inefficient processes.
Clients often come to our accounting services team with a goal of receiving more timely financial statements or other financial information. Our first step is often evaluating what systems are in place and understanding what processes already exist. We come on board and walk-through accounting processes in their current state. This often leads to identifying bottlenecks and areas for improvement. It also allows us to spend time with the client, becoming familiar with the greatest needs and biggest headaches.
Here’s an Example
At the onset of a project, we were going onsite to a client, opening stacks of mail, sorting vendor invoices and customer checks, manually keying activity into the accounting system, and distributing piles to employees for review and approval. Then, when approvals were received, we printed payables listings, printed checks, waited for signatures, then put signed checks in envelopes to be mailed.
Two key bottlenecks: manual processes and paper pushing. Time was spent on sorting and filing stacks of paper and tedious data entry rather than focusing on financial statement analysis and higher-level reporting.
Our client gave us the green light to implement new systems. We converted the accounting system to QuickBooks® Online, a cloud-based solution rather than an outdated system hosted on the company’s internal network. This allowed progress on financials to be made anytime and anywhere a connection to the internet was available. We then connected Bill.com – a cloud-based application overhauling the accounts payable process. This eliminated the need to rely on or send mail and the need to key in individual bills.
Instead of waiting on snail mail, vendors could email invoices directly to the Bill.com account. Instead of typing the bill information into the accounting system, OCR capabilities could read and pull this information automatically. Instead of employee reviewers going through piles of paper, they had a login that allowed them to review and approve PDF images of bills all in one dashboard online.
The system conversions saved time spent on payables and data entry and increased time spent on monthly financial statements, allowing them to be finalized weeks before they had been in the past. Having current financials created opportunity for management dashboards, implementation of real-time connections to sales systems, and more analysis on cost-saving opportunities.
When important decisions needed to be made, suddenly real-time financial data was a resource they could use.Business decisions must be made every day. It is not always possible to know what the best decision is, but without the right information, making the best decision is certainly much more difficult. Just like ordering at a restaurant without a menu. The team at MarksNelson can help get you the information you need when you need it.