8 Accounting Best Practices to Implement Now
Disruptive technology, changes to accounting standards, budget constraints, and operational challenges routinely keep accounting professionals on their toes.
Workiva has seen firsthand what some of the world’s top firms are doing to innovate within those limits. Based on discussions with thought leaders—as well as the research and experience of our own experts—here is a list of eight best practices for the accounting function.
1. Watch what the leaders do
Accounting and finance leaders are increasingly adopting cloud solutions, according to a report by the Financial Executives Research Foundation (FERF) and staffing firm Robert Half. In a survey of more than 1,700 financial leaders in the United States and Canada, 75 percent said they are using cloud solutions or plan to do so, up 13 percentage points from 2016.
Teams are also embracing emerging technology. The Big Four accounting firms have been hiring executives with experience in artificial intelligence (AI) and distributed ledger technology like blockchain, which allows for a secure, decentralized database of records, such as financial transactions.
You can do the same. Leverage vendors who can offer cutting-edge cloud technology that saves you time and offers a fast return on investment (ROI). Stay current with continuing education on topics surrounding accounting technology. The American Institute of Certified Public Accountants (AICPA) and The Institute of Chartered Accountants in England and Wales (ICAEW) are just two organizations with courses or webinars on blockchain.
2. Automate what you can, so you can do more with less
Accounting and finance organizations are automating invoicing, data collection, report generation, document storage, and compliance. In addition, many expect to automate processes such as financial planning and forecasting in the future, according to the survey by FERF and Robert Half. Streamlining administrative, clerical, and repetitive tasks frees up staff to focus on more value-added activities related to decision-making, which is one area where many organizations do not plan to automate.
3. Do your part for cybersecurity
No one is expecting you to out-hack the hackers, but there are practical steps you can take to reduce your exposure to risk.
Control access to sensitive documents
Choose tools that allow you to restrict who has permission to edit or view your databases, spreadsheets, reports, and presentations. Ideally, you should be able to restrict access not just to specific projects but even a specific slide, page, section, or spreadsheet cell.
Limit attachments sent via email
Hosting documents in a restricted space in the cloud eliminates the need to email attachments that could be corrupted or accidentally forwarded to the wrong party.
Choose solutions that work within your IT team’s security protocols
Even small steps matter, like the ability to tailor password requirements or to customize the conditions under which a user's access will be revoked.
4. Adopt investor-friendly practices before they become regulations
Just as you might research initial drafts of proposed regulations or taxonomy implementation guides to prepare for what may be required down the road, plan now to ensure compliance with upcoming regulatory deadlines.
For example, it has been voluntary for mutual funds and operating companies to submit Securities and Exchange Commission (SEC) filings in the Inline eXtensible Business Reporting Language (iXBRL) format since 2016. Now that the benefits and availability of iXBRL technology have become more ubiquitous, the SEC is phasing in a mandate for iXBRL. Wdesk users have been able to file in iXBRL since the beginning, enabling companies like Intuit Inc. to help lead the way in iXBRL adoption and recognize benefits early on.
“Inline XBRL creates an efficient method for viewing our financial data on the SEC website,” said Rose Mattozzi, lead accountant in SEC reporting for Intuit, which has already been filing in the web-friendly format. “This will benefit our shareholders. If it helps them to better analyze our financial information, then we are happy to help.”
5. Learn from others’ mistakes
Review what led to financial reporting failures, fines, and penalties at other organizations, so you can protect yours. Although SEC Commissioner Hester Peirce has spoken out against enforcement that does more harm than good, she and others at the SEC also have noted the long-standing intention to protect retail investors, as well as its focus on threats posed by cybersecurity issues.
6. Minimize surprises for stakeholders
SEC Chief Accountant Wesley Bricker reminds companies to consider what investors, lenders, and creditors will want to know about your operations. How will your company's performance be affected by modern marketplace factors, including changing demographics, technology, regulations, taxes, and politics? These are areas where an increasing number of stakeholders are asking for more transparency.
7. Hire people who have the courage to do what is right
“A company with clearly stated ethical values that are understood, promoted, and upheld can help attract or retain top talent,” advised Bricker at the Institute of Management Accountants annual conference and expo. Tony Tjan, CEO of the venture capital firm The Cue Ball Group, suggests five questions to uncover a job candidate's values, including a personality check disguised as a math question.
8. Make it a priority to recruit and retain nimble people who are open to new ideas
This can be easier said than done, as low unemployment rates make it harder to hold on to good employees and replace retiring baby boomers. However, you can put yourself in better position to attract new talent when opportunities do arise.
“Accounting professionals out there today have many options,” said Steve Saah, executive director of Robert Half Finance & Accounting. “If you step back and think from a big picture where we are as a country, the unemployment rate is below 4 percent. For college-educated professionals in accounting, finance, and technology, the effective unemployment rate is somewhere around 1.5 to 3 percent for any given position.”
To successfully land top talent across the generations, Saah says organizations have to be willing to:
- Move fast
- Communicate regularly with applicants, so a competitors cannot lure them away
- Understand what matters most to specific candidates beyond the compensation package, whether it is work-life balance, the ability to telecommute, or opportunities for career development
What other best practices are you implementing at your organization? Tweet at us @workiva.