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The Value of Continuous Accounting for Business:

Establishing the Foundation for a Strategic Finance Organization

Managing Finance More Effectively

Many senior finance executives want their department to play a more strategic role in the management and operations of their company. They believe there is value in shifting their focus from processing transactions to higher-value functions in order to be able to make more substantial contributions to the success of the organization. Continuous accounting can serve as the foundation for transforming the role of the department.

Continuous accounting is an approach to managing the accounting cycle that embraces three major principles:

  • Automating mechanical, repetitive accounting processes (such as allocations and reconciliations) in a continuous, end-to-end fashion to improve efficiency, ensure data integrity and enhance visibility into processes
  • Distributing workloads continuously over the accounting period (the month, quarter, half-year or year) to eliminate bottlenecks and optimize when tasks are executed
  • Establishing a culture of continuous improvement in managing the accounting cycle. Such a culture regularly sets increasingly rigorous objectives, reviews performance to those objectives and makes addressing shortcomings a departmental priority.

For a strategically focused finance organization, continuous accounting is essential. In our benchmark research on the Office of Finance, nine out of 10 participants said that it’s important or very important for finance departments to take a strategic role in running their company. Yet while the vast majority (83%) of companies’ finance departments perform the core functions of accounting, fiscal control, transactions management, financial reporting and internal audit, fewer than half that many – only 41 percent – play an active role in their company’s management and just 25 percent have implemented a high degree of automation in their core finance functions and actively promote process and analytical excellence.

 

 
 

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