0 comments on “How to Effectively Manage Year-end External Audits”

How to Effectively Manage Year-end External Audits

Most companies actually dread year-end audits.  You will find that Finance organizations are usually off-limits during this period as they struggle to make last-minute adjustments, prepare supporting schedules, find source documents, and review a year’s worth of transactions.  Stressed, pressured, and burned-out, risk of errors increase.  Overall — an unpleasant experience.

But year-end audits should not be disruptive.  Nor preparations should be done, well, at year-end.  To ease the stress during this period, below are simple changes and process improvement that your Finance organization can adopt.

PEOPLE

Plan your audit activities & deliverables and discuss with those who will be involved so they know what are expected of them.  A checklist of audit requirements and due dates that everyone, including your external auditors, can refer to is most helpful as it will keep people focused.  Schedule regular update meetings and use the checklist to track progress.

TECHNOLOGY

Leverage on available (and affordable) technology.  Reduce reliance on excel spreadsheets by investing in an accounting system that best fits your organization.  Most systems now come with subsidiary ledgers and customizable reports that will not only reduce time spent on data preparation but will also increase the accuracy of your information.  Documents-scanning technology (within your accounting system or as a separate software altogether) is also helpful when retrieving supporting documents requested by your auditors.

PROCESS

As mentioned, preparations for the year-end audit does not have to be done at year-end.  Embed automation, control, and period-end tasks within your day-to-day activities.  By adopting continuous accounting, you will be “audit-ready” any time of the year.

BONUS TIPS:

Year-end audit process will include review of your quarter one results right after the period under audit.  Make sure you don’t neglect your usual closing activities while attending to the requests of your external auditors.

Most of all, immediately after the conclusion of every year-end audit, take a moment to review, evaluate, and list down learnings and areas for improvement — both within your organization and with your external auditors — for an even more hassle-free year-end audit next time.

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How we can help? Developing and implementing a solid finance transformation agenda is the hallmark of our ACCOUNTING SERVICES model — we build, operate, and transform fundamental capabilities in people, processes, and technology. Contact us to know more about these services.

 

0 comments on “Management Insight: Status Quo is Riskier than Change”

Management Insight: Status Quo is Riskier than Change

Experiences certainly present lots of old and new challenges, and adds more valuable learnings to become better in future dealings.

As can be expected, change will always certainly happen – whether planned or unplanned.  Either because it is internally initiated or externally triggered by events. Impact of changes can either be isolated or widespread, short-lived, or longer-lasting. But when is change good or bad?  When is it too soon or too late? When is it too little, too big, or just right?

People can either welcome or resist change.  People can either choose to be the catalyst and be in the forefront or choose the status quo and risk being left behind.

Whether we like it or not, change will undoubtedly happen – so might as well be open to liking it rather than resisting or fearing!

And in case we fail, we fail early.  And when we fail early, we learn earlier than the many. Remember, we can always stand up… and change again!  Just continue moving forward but not without the learnings!

Here’s an inside story of real happenings in a company who pioneered an industry segment years ago: Visibly a lucrative, profitable business, it quickly attracted other businessmen to enter the market like mushrooms, growing exponentially.  The multitude of entrants grew faster than the pioneer’s own business and consequently reduced its share to merely 35% of the market it dominated during its earlier years.
Although the enterprise was quick enough to implement the growing technology-enabled products, the head office administration, support services, finance and management organization remained traditional.  Instead of propelling the front businesses, these head office services and practices slowed down business expansion thus allowing the rest of the market to grow faster.
Realizing the need to change, they hired executives, managers, and professionals to enable transformation of its central operation and management.
New people in the organization expectedly introduced surgical transformational changes. Expectedly as well, the natural resistance to change of the homegrown people prevented the faster realization of the advantages and benefits. Just as when the initiatives were about to peak further and reach new highs, significant external events triggered tsunami-like waves of challenges risking all the great business creativities.
Suddenly, the entire organization scampered for further and quicker changes.  Many of the postponed actions in consideration of homegrown people’s sensitivities became absolutely urgent and thereby executed swiftly. Only this time, rightly or wrongly, there was no longer regard to human sensitivities as crisis situations require desperate (not necessarily deliberate) counter measures.  What were intended to make the business thrive are now being made to merely survive.

In this story, change initiatives introduced but sidelined in the past turned out to be the most sought life-saving medicines when needed desperately. See, protecting the status quo is riskier because the rest of the world will continue to change anyway. Don’t forget: LIFE HAPPENS!

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How we can help?

Developing and implementing a solid finance transformation agenda is the hallmark of our ACCOUNTING SERVICES model — we build, operate, and transform fundamental capabilities in people, processes, and technology. We go beyond change management! Contact us to know more about these services.