eBooks
Issue link: https://read.uberflip.com/i/909382
The 5 questions to ask your controller 3 Introduction The new mandate for controllers—and CFOs As the office of the controller becomes ever more strategic—creating higher levels of financial visibility to help drive growth and profitability—the financial organization's relationship to the controller role must evolve as well� Specifically: Today's CFO needs to work closely with the controller to ensure that, one, the organization gets the full benefit of the controller's talents and knowledge and, two, the controller's office is operating at the highest levels of efficiency and accuracy. Ask your controller the following five questions to initiate a conversation around best practices. How many manual journal entries are we making during the closing process? An excessive number of manual journal entries needlessly extend a closing period—and can also be a leading indicator of lurking problems� They can conceal anomalies and errors that actually have broad, systemic roots. You may be plagued with variable accounting processes—or a level of complexity that calls for revised standards� To optimize the closing process and reduce the incidence of manual journal entries, you and your controller can consider implementing these best practices: • Create comprehensive policies: First, carefully define and document your accounting policies. A growing company's policies o en evolve ad hoc. Auditors, however, want clear, coordinated policies, rules, and procedures that everyone follows—especially when there are complex, nuanced issues such as revenue recognition� • Work with auditors: What exceptions are they uncovering? Your auditors can be an excellent source of external feedback. Review your accounting policies with them—and seek their agreement prior to the actual audit� Also, consider grouping your key transactions together, with policies documented, to speed the audit review and minimize objections and questions. • Formalize the process of manual journal entries: You won't eliminate manual journal entries—nobody can—but you may reduce them by formalizing the process. Part of the answer is automation, which will help enormously� But you should also devise rigorous processes that discourage manual entries, and ask your team to seek alternative ways to account for recurring period-end adjustments� • Store documentation with manual entries: Require that the accounting team capture and store supporting documentation alongside each manual entry� Months later, when questions about long- ago transactions arise, you'll be able to quickly, efficiently retrieve answers. And that boosts your auditors' confidence. Key takeaway: Use audit difficulties and exceptions to identify areas needing policy definition, process improvement, and automation. Q1