1. Accounting Team – The Custodian of the Transactions
The accounting team is the custodian of the transactions. They must understand the impact of each transaction they record. Why? Unless they understand how the transactions they record translate to the end result, i.e., financial or management reporting, they will never be able to fathom the significance of their work. They must realize “the importance of their work”. They must learn to ask why they are doing what they are doing. They must realize that they are not merely accountants. Their work contributes to the success of the entire organization.
This is what I believe are the steps and responsibilities of the accounting team:
a) The Foundation
The Accounting team must understand that they provide the foundation for financial analysis and reporting that results in making informed decisions.
b) Data Accuracy and Reliability
To build a solid foundation, the accounting team's primary responsibility is to ensure the data's accuracy and reliability.
c) Implementing Internal Controls
Developing and implementing adequate Internal Controls facilitates the integrity and reliability of the financial data.
d) Robust Accounting Processes
Once internal controls are implemented, robust accounting processes should be established for recording, reconciling, and reviewing the transactions.
e) Establishing a Review Mechanism
The preparer-checker control ascertains that there is a transaction review process in place to identify and resolve data entry errors and compliance with regulations and accounting standards.
f) Periodic Reconciliation
The Accounting team must ensure that the reconciliations are performed and reviewed monthly. Discrepancies should be resolved before the month-end close.
g) Dependable Financial Results
Having accurate and dependable financial results at the end of each month is crucial for the FP&A teams to conduct various analyses, such as recognizing patterns, assessing progress, and analyzing variances.
2. FP&A Team – The Meaningful Insights
The FP&A teams shouldn’t be spending time cleaning and organizing the data. They should be spending time driving meaningful insights. Their work in what really happened, why it happened, and what to do about is more beneficial to the business than time wasted on data cleansing.
a) Seamless Data Integration
The key here is the seamless integration between the ERP system and the reporting and consolidation tool. Integrating data ensures FP&A receives the data in a shape that facilitates driving meaningful insights.
b) Implementing Internal Controls
Similar to the accounting team, establishing internal controls within FP&A to maintain data integrity that leads to accurate insights.
c) Understanding of the Data
The competency in understanding the accounting data allows the FP&A team to extract its financial implications effectively.
d) Interpreting the Data
Adept interpretation of data, enabling FP&A to translate numbers into actionable business narratives. The narratives that tell the story behind numbers and transform numbers into strategic guidance.
e) Presenting the Story
The work of FP&A doesn’t stop at driving meaningful insights. The test of their skills is presenting those numbers in a way that FBP can translate into the business language.
3. Finance Business Partner(FBP) – The Storytellers
Finance Business Partners have the ability to interpret the FP&A reports into business language. They not only understand the numbers but can also tell the story behind those numbers in a language that businesses understand.
a) Comprehension of Numbers
Finance Business Partners use their number expertise to understand monthly results comprehensively, ensuring insights are accurate and relevant.
b) Financial Acumen
They possess strong financial acumen to grasp the nuances of the results and their implications.
c) Business Insight
Through their business knowledge, they develop a deep business insight to align financial data with a broader operational context.
d) Tailored Message
FBP crafts tailored messages that translate accounting insights into business language effectively.
e) Storytellers
FBP has mastered the art of storytelling, using narratives to convey meaning beyond mere numbers. They present results to the business, considering all factors mentioned earlier for impactful communication.
f) Two-Way Communication
The FBP's role is not only to communicate business results but also to understand business expectations thoroughly and convey them to FP&A and accounting teams for aligned reporting and two-way communication.
In a nutshell, the collaboration between Accounting, FP&A, and Finance Business Partners is not just a choice but a strategic imperative. Each function plays a unique role, contributing to the seamless flow of accurate and insightful financial information. Organizations can unlock the potential of their financial collaboration by adhering to the outlined steps, from building a solid accounting foundation to translating numbers into actionable narratives. The result is not just accurate reports but a unified approach that empowers businesses to navigate the complexities of financial data and make informed decisions.
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