4 ms·

What I'd rather see is monthly "lightly audited" financials. This would provide a lot of benefits around transparency, reduce the incentive for quarterly and an

What I'd rather see is monthly "lightly audited" financials. This would provide a lot of benefits around transparency, reduce the incentive for quarterly and annual "cramming / forward entry" of sales, and provide for more of a "continuous audit" for the various accounting firms - reducing the size of the end-of-year rush (since most audit activity should already have been completed) and making it harder for companies to fudge their figures.

r00fus 8y ago
Sounds great - how would you lighten the burden without introducing further complexity? 3x more reports = more burden, right?
- colechristensen 8y ago
  Industry standards and standard tools? We have computers for doing lots of hard things now.
  - wtvanhest 8y ago
    You would need to increase FP&A HC to cover the workload of explaining numbers throughout the org. Closing the books at large companies still takes time and manual effort as well.
    - nradov 8y ago
      Closing the books is an anachronism left over from paper accounting. With modern automated accounting the books can be kept continuously closed.
      - r00fus 8y ago
        Do you work on corporate finance? Because constantly running such reports is not free. Can't just handwave away the nontrivial administrative overhead. Heres a snapshot - monthly financial closes often require forward or reverse accounting so things are properly budgeted and balanced. A trial balance report is easy to run, but then the numbers have to be reviewed & approved and discrepancies resolved.
        nradov 8y ago
        Running automated reports is essentially free. With a properly designed accounting system it becomes impossible to create discrepancies in the first place. This requires a paradigm shift akin to doing software development with full continuous delivery (100% automation of the build / test / release) cycle but some forward thinking companies have done it successfully.
        jacques_chester 8y ago
        I believe the point r00fus is making is that a lot of these transactions require human intervention. Lots of situations require professional judgement -- accounting is not simply bookkeeping (for which yes, computers can carry the can). Still, from an ignorant outsider's POV, it would be interesting to run towards the pain. My instinct is that smaller batch sizes are better overall.
        nradov 8y ago
        Sure many transactions require human judgment. Shift left. Make those decisions before entering transactions into the main accounting system. Don't wait until the end of a certain period and then try to figure out everything all at once.
        wtvanhest 8y ago
        Most decisions are made prior to entering data in to the system. One area that is an example are accruals. You must wait until the end of the month to know what invoices haven't hit the accounting ledger to then know what accruals to enter. It gets complex because invoices are not standardized and it typically requires a level of judgment as to whether they should be entered. Then there are other transactions. Is this capex entry really capex or should it be opex? Well, we need a meeting with a technical accountant. There have been a lot of steps toward automating accounting, and most (lets say 95%) of transactions are instant and require no intervention. The 5% remaining require human intervention. In order to close the books faster you would need to either figure out a way to automate the rest (really hard) or hire a bigger finance and accounting staff who would then be idol most of the month. I dont work in accounting, I work in FP&A, so I am sure there are other examples I dont know about.
stretchwithme 8y ago
What if you released raw numbers every month or constantly? How many cars sold, cash in the bank. Any number that would not help your competition. And that require no preparation.
- nradov 8y ago
  Right with modern continuously closed accounting systems there's no reason this couldn't be done. Inertia and tradition are the only reason for releasing financial statements on a quarterly basis instead of more frequently.

r00fus 8y ago

Sounds great - how would you lighten the burden without introducing further complexity? 3x more reports = more burden, right?

colechristensen 8y ago
Industry standards and standard tools? We have computers for doing lots of hard things now.
- wtvanhest 8y ago
  You would need to increase FP&A HC to cover the workload of explaining numbers throughout the org. Closing the books at large companies still takes time and manual effort as well.
  - nradov 8y ago
    Closing the books is an anachronism left over from paper accounting. With modern automated accounting the books can be kept continuously closed.
    - r00fus 8y ago
      Do you work on corporate finance? Because constantly running such reports is not free. Can't just handwave away the nontrivial administrative overhead. Heres a snapshot - monthly financial closes often require forward or reverse accounting so things are properly budgeted and balanced. A trial balance report is easy to run, but then the numbers have to be reviewed & approved and discrepancies resolved.
      - nradov 8y ago
        Running automated reports is essentially free. With a properly designed accounting system it becomes impossible to create discrepancies in the first place. This requires a paradigm shift akin to doing software development with full continuous delivery (100% automation of the build / test / release) cycle but some forward thinking companies have done it successfully.
        jacques_chester 8y ago
        I believe the point r00fus is making is that a lot of these transactions require human intervention. Lots of situations require professional judgement -- accounting is not simply bookkeeping (for which yes, computers can carry the can). Still, from an ignorant outsider's POV, it would be interesting to run towards the pain. My instinct is that smaller batch sizes are better overall.
        nradov 8y ago
        Sure many transactions require human judgment. Shift left. Make those decisions before entering transactions into the main accounting system. Don't wait until the end of a certain period and then try to figure out everything all at once.
        wtvanhest 8y ago
        Most decisions are made prior to entering data in to the system. One area that is an example are accruals. You must wait until the end of the month to know what invoices haven't hit the accounting ledger to then know what accruals to enter. It gets complex because invoices are not standardized and it typically requires a level of judgment as to whether they should be entered. Then there are other transactions. Is this capex entry really capex or should it be opex? Well, we need a meeting with a technical accountant. There have been a lot of steps toward automating accounting, and most (lets say 95%) of transactions are instant and require no intervention. The 5% remaining require human intervention. In order to close the books faster you would need to either figure out a way to automate the rest (really hard) or hire a bigger finance and accounting staff who would then be idol most of the month. I dont work in accounting, I work in FP&A, so I am sure there are other examples I dont know about.

stretchwithme 8y ago

What if you released raw numbers every month or constantly? How many cars sold, cash in the bank. Any number that would not help your competition. And that require no preparation.

nradov 8y ago
Right with modern continuously closed accounting systems there's no reason this couldn't be done. Inertia and tradition are the only reason for releasing financial statements on a quarterly basis instead of more frequently.