Next-level controlling: enriching accounting with new insights
Apr 03, 2018
The role of today’s finance departments is changing: more than processing numbers and reporting, finance is expected to actively participate in the business. Do your existing accounting and controlling tools support that role? A solid ERP foundation is a must-have. If that’s in place and working fine, you’re ready for next-level controlling – a step-by-step process for gaining better insights and, consequently, creating value for every single colleague around you.
To illustrate how finance can move from accounting and recordkeeping to creating true business value, delaware designed a 3-wave transformation model. Wave 1 targets efficiency gains: customers implement tools – like an ERP system – to optimize the operational aspects of accounting, budgeting, costing and reporting. Wave 3 focuses on truly transforming finance, e.g. through advanced technology, to help it create real value for the business. The intermediate wave, wave 2, explores ways to increase the effectiveness of all finance processes.
How can we do more?During wave 2, a company takes controlling to the next level: it explores ways of deploying its existing ERP configuration to the max, with the goal of doing more with the solutions they have in place. How? The road to increased effectiveness is a step-by-step process that starts with an analysis of the existing system, processes and pain points. Questions like ‘is the quality of the master data acceptable?’, ‘do our employees have the required skills?’ or ‘what departments need more insight?’ can help to identify aspects that need improving.
Frameworks to deliver quick winsTo help our customers define quick wins in this next-level controlling exercise, we developed a series of frameworks. The responsibility accounting framework, for example, helps finance teams to analyze, attribute and report variances in a structured way, so they can discuss it with the responsible business counterpart. The framework for the charge-back of central services helps finance list the costs of services in a catalog, thus informing every division about the cost of certain ICT services like ICT, based on mutually agreed principles.
We also describe a standardized approach to examining the quality of master data, and another to train employees on the use of the supporting IT tools . Every initiative helps raise the maturity level of the finance team and the quality of the services they offer to the rest of the business.
The power of collaborationThanks to next-level controlling, departments like production, logistics, marketing and executive management get the data and analytics they need to make business decisions. That implies close collaboration between finance and these departments.
If, for example, our responsibility accounting framework shows a manufacturing cost variance that is attributable to the price of raw materials, the finance team will look for ways to optimize costs with the purchasing team. In this way, next-level controlling brings finance and business closer to each other, which leads to more insights, mutual understanding and better results.