Group CFO

In my estimation, about 50% of Group CFOs still base their financial statements on numbers generated from Excel and Google spreadsheets. Why is that a problem? Because nine out of ten spreadsheets contain errors, a fact I have driven home in my previous articles.

As a CFO, I know that the buck stops with you. But how are you supposed to present watertight reports or make accurate forecasts based on numbers that you can’t totally trust?

You don’t need me to tell you that errors are not okay when it comes to financial statements and yet statistically, some errors feature in almost every spreadsheet, every month.

But, I get it. I understand it’s happening because few businesses can afford the million Rand or so needed each year to license the top-end balance sheet integrity and GL reconciliation software that could go a long way towards reducing this risk.

But I’ve got news for you. You’ll be surprised to know that there are much more affordable financial close options to reconcile your general ledger available, so stick around.

1. Fraud Detection

Wouldn’t it be fantastic if you could be sure that your reconciliations are solid and that you can totally rely on the numbers in your financial statements?

For sure, the traditional route of emailing of recon spreadsheets and sending supporting documents by courier is old-fashioned. This outdated ‘supporting docs in a box system’ makes fraud detection difficult. Auditors must first locate the relevant box and then rustle through and scrutinise the documents in this box, in order to be able to locate the documents related to their enquiry. Then the supporting documents have to be scanned or retyped before being used.

I’m sure you must have thought to yourself, ‘There must be a better way to do this’, somewhere along the line.

Tedious and time-consuming processes can often be a recipe for fraud to slip under the radar, especially when everyone is pressed for time. Incidentally, when are we ever not?

2. Trust my Numbers

Without being able to trust the numbers, your reporting or forthcoming analysis can be challenging to feel confident about. If it doesn’t add up then it reflects badly on you.

Company financial reports are constructed from GL balances and these GL balance errors can distort the balance sheet.

Furthermore, trusting the numbers in a balance holds inherent risks for banks lending capital, investors assessing the health of the business and for the company C-suite execs basing strategic decisions on these numbers. It becomes a case of target shooting in the dark.

As a CFO, you can only be confident when you know that the balance sheet is an accurate reflection of the health of your company.

3. No More Boxes in your Office

It seems silly to mention the boxes that stack up in the archiving process of source documents. I have on occasion struggled to find a CFO or Group FD amidst the piles and boxes of documents around their desks.

Archiving of supporting documents in digital format or at worst as scans is a much more practical and sustainable solution.

4. Time Wasting

Manually loading transactions into reconciliation spreadsheets piecemeal also wastes time and is extremely error-prone. Duplication of transactions is a relatively common occurrence; and alarmingly, many instances of restating of balance sheet figures have been reported.

It’s a maze of mistake potential: Cut and paste into the wrong locations, formula errors, missing or duplicated rows of data… these are just a few examples of where it could all go wrong. Human error or tampering provides dodgy documentation.

And whenever it’s wrong it’s your credibility that’s potentially on the line. The C-suite wants facts and figures and not excuses.

5. Monitor your Month-End

As a CFO that oversees the manual month-end close process, you may have no way of assessing work progress because it’s tough trying to keep an eye on things with severely limited vision. The wrong data can make you feel like your eyes are playing tricks on you.

All you may be able to see is that there are desks stacked with piles of boxes but have no way of telling which branches have submitted work and which have not. Again, it’s hard to sound like you know what you’re doing if you’re not sure of either individual or overall progress.

How much more reassuring would it be if you could track the progress of all branches, companies and recon staff from your desk, in real-time?

Chat to me about solutions to all five of the aforementioned challenges and get 20/20 vision again when it comes to ensuring the integrity of your financials.