Can You Flow it Through?
Can you flow it through?
If you've been in the financial reporting business as long as I have, you've likely been asked this question at least a few times. I've been asked it more than a half dozen times in my career and these are just the instances I can remember. So what exactly is it referring to?
Translation: There is going to be a late change to the numbers. How easy will it be to update everything?
Allow me to paint a quick picture. Visualize a small pond with water so still it looks like glass. The pond is analogous to your reporting documents a week before the analyst call. Now picture this. A small stone splashes down into the water. The stone represents a change to the numbers. I can almost guarantee that the ripples created by that stone, albeit small in size, will reach the shoreline.
"My stress levels dropped because my confidence
in the numbers increased."
So getting back to my opening remarks, by 'everything' I really do mean everything... starting with the update to the general ledger. Then comes the financial statements followed by all the numbers, text and variance explanations in the MD&A, the management reporting deck and the Audit Committee presentation. Don't forget about the KPI metrics and financial covenant computations that have already been signed off too. And how about our friends in Investor Relations who may not be enjoying the news of the day that their carefully scripted earnings release, investor deck and supplementary information package all have a late breaking change coming.
Having all these reporting materials updated by the next morning for re-circulation is also not unusual. These are some of the challenges faced by finance teams dealing with what I call "the flow through". Whether you're inside a week from your Sedar or Edgar filing or days away from your Audit Committee mailing, the sensitivity of these documents together with the immovable deadlines cause days to turn into hours and hours to minutes. Does this situation sound familiar to anyone?
"There is going to be a late change to the numbers. How
easy will it be to update everything?"
For those that are thinking this doesn't sound too pleasant, its not. Having been through it once doesn't make the next occurrence any less stressful either. There had to be a better way I thought. A solution to the complete waste of time spent re-checking fifty or a hundred data points because one wrong number caused us to lose confidence in the entire data set. I'd often ask myself, how many times do we need to check the numbers before we trust them? Is this value-added time for my team?
Suffice to say, each quarter end I would say goodbye to my family, friends and loved ones for a 6 week period. Vacations were out of the question. Less sleep. Healthy eating and trips to the gym were replaced by Chinese takeout and pizza nights stuck in the office with my team (no offence to my teams, they were all exemplary). Perhaps the worst part was knowing that I'd be repeating all of this in three months. I finally decided to do something to put an end to this unpleasant situation (or at least make it more tolerable).
When we implemented the Wdesk cloud platform for financial reporting, it was a game changer for me, my teams and the organizations I worked for. I won't bore you with all the technical capabilities of the collaboration software as there are far too many for this discussion. What impressed me the most is the positive impact that Wdesk had on the quality of my work life as an accountant. My stress levels dropped because my confidence in the numbers increased.
The cloud platform, together with a bit of ingenuity in how we set it all up, saw hundreds of built-in data validations now in place to check the integrity and consistency of the data and text across all reporting documents. Updates and late changes were no longer a thing. I knew precisely what numbers changed, who did it and why. There was a repeatable and sustainable process in place to control even the smallest changes. We were in complete control, which is how every CFO, controller and reporting team deserves to feel at quarter end.