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Financial Reports That Do Not Meet Gaap Is This An Issue For Financial Controllers?
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Problem: If you’re financial coordinators and administrators hardly trust the month-end close numbers, is your financial reporting fully GAAP “compliant”?
Survey results show that a mere 19% of financial controllers and administrators fully trust their reported figures. Considering that accounting standards worldwide are steeped within the belief that financial reports are as reliable as they possibly can be, it appears that 81% of corporations are slipping through vital aspects of GAAP (Generally Accepted Accounting Principles) in spite of all efforts to abide by them.
But why are numerous corporations falling through the cracks and failing to report to GAAP standards?
One potential reason finance departments are slipping through the generally accepted accounting practices (according to Forbes), is the passing over of responsibilities from CFO to the financial Controller (FC). The CFO is being expected to deal increasingly more with investors and external relations than internal financial reportage. As such, FCS are having to adopt the data reporting and analysis in addition to the communication and presentation of that data – a job traditionally left to the CFO.
An advised conclusion is that as a result of the ordinary tasks of the FCS, they currently have less time to devote to managing the financial reconciliation and reporting process, instead leaving their financial employees to manage the work flow. In addition, with a lack of this clear active leadership the accounts department is left juggling the numerous monthly-close tasks with a lack of decisive oversight.
That is not our perception. Instead we tend to believe it is the shortage of an automation tool that seems to be the core. Because without such a tool, an efficient standardised month end close process increasingly becomes practically much harder to keep up, and as well as that even more difficult to decisively lead!
Time does not wait for any financial professional
Besides finance departments are also under increased pressure to ensure they close the books on time. Sadly, however only a mere 35% of financial and accounting professionals claim they are continuously able to report on the close date, and a humongous 79% said they were under pressure to close quicker.
If finance departments are under such a large amount of pressure to close quicker, yet 65% cannot be assured to report on time, then it starts to become clear exactly where the issue lies.
“Mind the GAAP!”
One way of improving the accuracy and reducing the time taken to compile your financial reporting is to refine your account reconciliation processes. It is throughout the account reconciliation processes that mistakes are most frequently created and the most time is wasted.
Your initial step to reconciliation best practice is to conduct a full reconciliation audit.
Your next step is to analyze and consider the option of automated account reconciliation software. This software will not only dramatically speed up the information and data matching process, it also can facilitate by making enhanced reports for the financial Controller to present to the board.
Look for a reconciliation solutions that permits you to:
- Seize total management over the total process from one dashboard
- Gain a period of time summary of the monthly close process
- obey absolutely with all rules by making set rules
- Increase the productivity of your finance team by automating the grunt work
- close your finance accounts and file your reports on time
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