Let’s face it – while preparing GAAP or IFRS-compliant financial statements is essential for business operations, it doesn’t make us accountants feel like we’re making a direct or significant impact on the organizations we serve.
Well, guess what?
Cost-cutting is overwhelmingly the top initiative for companies today due to the current macroeconomic climate. And we accountants play a focal role in ensuring its success. Here are 3 reasons why:
Accountants in the controllership are the stewards of most, if not all, approval-related processes in the entire purchasing cycle — from PO requisitions, to invoices, to cash disbursements. If these processes are improperly designed, operating ineffectively, or monitored inappropriately, efforts to reduce costs and spend are futile.
As accountants, we are the primary line of defense for coding accuracy. For example, if the marketing team’s contractor expenses are miscoded by our GL or AP teams as engineering, folks analyzing existing spend will be starting with an incorrect cost basis. To make matters worse, these types of errors can impact several departments (in this example, marketing and engineering), greatly hindering cost-cutting efforts.
Say a department, legal for example, goes through a grueling exercise to identify cost-saving opportunities. They’ve successfully negotiated new, discounted rates with outside counsel, and, in some cases, even terminated long-time relationships with valued vendors. What happens if accounting misses a significant, unaccrued expense from the prior year? That expense is incurred or counted in the current period and effectively blows up the current quarter’s budget.
Many of us accountants are naturally trained to think about the GAAP/IFRS-related impact first. But make no mistake — our business partners need our help more than ever, and cost-cutting is where we can shine. It’s up to us to embrace the moment and execute our responsibilities more effectively. A great way to elevate our game is to evaluate our existing team, processes, and systems to meet today’s unique challenges. Stay tuned for more tips in upcoming blogs.
Gappify, founded in 2016, is a cloud-based provider of accrual automation solutions for mid-market and enterprise accounting teams. The company is headquartered in New York City, with offices in Berkeley, California, Washington DC, and Manila, Philippines.
Its team consists of accountants and CPA’s from Big Four accounting firms and software innovators. Gappify is also supported by strategic advisors from some of the world’s most recognized technology companies and is affiliated with the top companies & accounting organizations.
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