accounting and finance

Benchmarking Accounting and Finance Functions

The financial sector is experiencing an influx of change and transition as technology becomes incorporated into more and more of its practices. Of course, the intention is to streamline processes and automate some of the more mundane tasks associated with everyday work in the field. It’s an exciting time marked by a heightened need for new practices and the appropriate talent to operate it. The 2018 edition of Benchmarking Accounting and Finance Functions focuses on such trends and what it means for the sector as a whole.

How Does Technology Influence Accounting and Finance?

The financial sector is geared toward producing results. Now, more than ever before, there is a requirement to drive efficiency, reduce costs, and simultaneously create value. At the core of the changes are the finance leaders who are not only required to understand the technological changes but the regulations that seem to be created right alongside them.

Is it More of the Same?

It may not seem like such things are novel concepts in the accounting and finance world. The truth is, they aren’t. However, the speed and intensity in which changes are being made are certainly something that working professionals have likely not experienced in their careers. Professionals, new and seasoned, can benefit from understanding the landscape of the industry and what those changes could mean for their future and the future of the sector.

Intended Audience

Who would benefit from taking a look at the report? Seasoned professionals may have the business concepts down, but one of the hardest things for them will be learning the constantly changing technology that is impacting their work more than ever before. Novice professionals will also need to understand the bigger picture of how the technology works with the traditional approach to finance.

Overview

Staying abreast of the latest news in accounting and finance will help professionals have a stronger grasp of the climate of the industry. It could help people prepare for training and even understand the bigger picture of how changes could impact every day as well as the future of the work.

For more financial industry news, check out: New Changes to PCAOB and What They Mean.

Understanding 842

Understanding ASC 842

ASC 842 produces a substantial overhaul of the previous accounting treatment for leases, ASC 840, with the most significant change being that most leases will now be capitalized on the balance sheet. The goal of ASC 842 is to provide lenders and institutional investors with increased visibility into the leasing obligations of lessees.

Types of Classifications

Under the previous US GAAP regulation, leases were classified as either Operating Leases or Capital Leases. While Capital Leases were recorded on the company’s balance sheet, the Operating Leases were not. The new/current ASC 842 standard changes the types of classifications and the balance sheet treatment. With the new standards, both classifications of leases, Finance and Operating, will be on the balance sheet.

ASC 842 Transition Period

The transition period for most public companies began with the accounting period starting on or after January 1st, 2019. However, most private companies and some other entities have until 2020 to make the change.

Updated Disclosure Requirements

The new regulation requires extensive disclosures to increase transparency related to revenues and expenses regarding lease contracts. Lease entities are now required to identify whether a contract contains a lease when it is initiated. A contract is defined as a lease if it gives the lessee the right to “control” the use of property in exchange for consideration.

Control exists if the lessee has:

  • The “right to obtain all of the economic benefits from use of an asset.”
  • The “right to direct the use of that asset.”

This definition differs from the previous guideline, GAAP, that required the lessee to meet only the 1st requirement. Under the new standard, it’s up to the entity to determine whether it obtains the “right to direct the use” of the asset.

A comprehensive approach to compiling data is crucial to helping auditors understand how organizations have reached their lease determinations. Companies will need to consider details not typically thought of as leases, including outsourced warehousing, data management, or supply arrangements. These may be subject to the new guidance and therefore require capitalization.

Questions

There are still some fuzzy ASC 842 details that need to be ironed out. For example, an approach where the lessee models out its incremental borrowing rate for a standard property mortgage has been suggested.

Additionally, for companies with large numbers of leases, for example a national retailer with leased stores in several locations. An approach where leases/with similar characteristics get grouped into cohorts, and its value is calculated on a portfolio basis has been suggested.

However these fixes are addressed, ASC 842 promises to make 2019 a learning experience in leasing activity.

For more information about our financial and consulting services please, click here.

communication skills

Communication Skills for Career Success

Many of the best performers in the workplace aren’t necessarily the individuals that spend the most time at their desk. In fact, a surprising number of wildly productive employees spends quality time away from their office chairs.

Their ability to communicate effectively helps these individuals apply themselves in ways that increase their productivity above those around them. Communication is one of the most important and sought-after talents for business professionals. If you are trying to increase your marketability, here are some communication skills to focus on:

Listening

Communication is a two-way street. We need to be able to effectively send our own messages in addition to receiving messages from the people around us. Effective listening is a multi-step process, highlighting your ability to hear, comprehend, and clarify the information that you are receiving. Effective listening skills can help you quickly identify what the big issues are and allow you to quickly circle in on a solution.

Identify Nonverbals

Individuals that can quickly and accurately identify and interpret nonverbal communication often find themselves a step ahead of their peers. Being able to accurately read the temperature of a room, enables you to answer questions or concerns before they have even been voiced.

If your audience is suddenly attentive and focused, you may have hit on some keywords that they are really interested in. This can allow you to go into more depth on the important topics. Conversely, if your audience is checking out or looking at their watches, you know that this isn’t the time to delve deeply into an issue.

Show Empathy

Communication doesn’t always deal with easy topics. If discussions are heated or tense, your ability to safely navigate through a conversation can not only save a client but can end up being a net benefit to your relationship. Showing empathy can let others see that you truly understand their issues and that you respect the position that they are in.

Master Communication Forms

Today’s workplace is full of different generations of tech-savvy individuals. Younger coworkers or clients may be disinclined to work face to face, but may prefer text messages, while other people will be offended if you send an e-mail about an important topic. Learning your audience and their preferred method of communication can be key.

For more communication tips, check out:
How to Make Introductions at Business Networking Events

tips for financial professionals

5 Tips for Finance Professionals

Success for finance professionals doesn’t come easy.  It requires a unique blend of both technical and soft skills rarely found in one individual.  While technical skills are easy to identify and can then be obtained, the required soft skills are often nebulous and hard to grasp even once explained.  Below are 5 tips that have guided me throughout my successful career in finance.

Think Like an Investor

This is what separates successful finance professionals from the rest.  When you think like an investor, you care.  You care why products are not performing to forecast and you care when a new product launch gets delayed. You find out what caused the delay and if there’s anything that can be done about it.  After all, you want to get the greatest return on your investment that you can!

Let Me Tell You a Story…

One of the earliest and most common ways information was passed between individuals was through the use of stories.  As a finance professional, you are a vendor of information and must utilize the power of stories to summarize and explain results in a memorable way.  Second tier finance professionals just recite facts and figures which, in their raw form, can be disinteresting and difficult to extract meaning from.  When management starts looking to you early and often to tell the story, you know you’re on the path to success.

“Trust but Verify”

A finance professional without credibility will quickly find themselves unemployed.  As previously stated, finance professionals are vendors of information and sometimes our source of information is incorrect or incomplete.  “Trust but verify” is the attitude often quoted by finance professionals to reflect the fine line we walk between trusting the people and processes which provide us information and validating the accuracy of the information as we vet the data.

Use Caution when Changing the Narrative

Sometimes the narrative changes because you reported on bad or incomplete information.  Other times, the narrative changes because additional factors are discovered.  Whatever the reason for the change in narrative, it’s going to happen during your finance career and it needs to be handled very strategically.  Make sure to “close the loop” on the narrative change, meaning you should have answers to as many of the below question as possible before discussing it with management:

  • Materiality – How large is the change?
  • Cause – Why is the narrative changing?
  • Timing – Why now/why wasn’t this discovered sooner?
  • Solution – What will prevent this from happening again?
  • Scope – How do we know this isn’t happening anywhere else?

Being able to minimize fallout and concerns from narrative changes helps to preserve your credibility, displays your business acumen, and allows management to focus on value-add activities instead of “babysitting.”

Pay Attention to the “Flavor of the Week”

Some items warrant our attention regardless of how material they are…these are often the “flavor of the week.”  It can be anything that catches upper management’s eye and will receive extra scrutiny for the foreseeable future until usurped by the next flavor of the week.  Being able to read between the lines of corporate initiatives, acquisitions, and questions from management, will help you identify the new flavor.  Being able to tell the latest story shows that you are in tune with leadership and, if you can improve the metric, management and other finance professionals will note that you have the influence to drive positive change in your organization.

Author – Nathan Vannoy, Big 4 CPA, MBA
DLC Finance and Accounting Consultant

Click Here to learn what it takes to become a
DLC Finance and Accounting Consultant.

resume keywords

Adding Keywords to Your Resume

Creating your resume is never a never-ending process. In addition to updating work experience and skills, keywords should be another area of concern. Strategic keyword placement, when done correctly can help ensure that your resume makes it through the automated applicant tracking systems (ATS) that most employers are now using. As well as, stand out to the hiring manager if your resume makes it through the ATS to their desk. But, there are a few general rules to follow.

Watch the Placement

While keywords can be beneficial in making sure that your resume is taken seriously, poor placement can also get it thrown in the trash. Individuals who cram keywords together, use unnecessary fluff, or put them at the bottom of the page aren’t going to be getting as many calls as those that strategically use them. Experts recommend that you scatter the right keywords throughout the resume.

However, as screeners scan your resume, they usually start at the top and work their way down. This means that if they don’t see something they like in the top third of the page, the rest of your resume may never be looked at.

Selecting Keywords

Each time you apply for a position is an opportunity to connect, so you should consider modifying your resume for every position that you apply for. This doesn’t mean that you have to create a document from scratch, but you should tailor your resume to the job. Scan through the job posting and write down all of the different words that stick out to you, and then tailor your resume using those keywords.

Keywords to Avoid

While selecting keywords, it can be equally important to make sure not to include some phrases that can be seen as negative by experienced resume reviewers. Phrases like “results-driven” or “goal-oriented” aren’t great descriptors for potential employees. Instead, focus on specific, and measurable instances that convey those points.

Additionally, don’t just use a thesaurus to change words. Personalizing your resume to the position can help your resume stand out from the rest and get you the job you want!

For more job interview advice, check out Post Interview Thank You Note Tips

hiring the right candidates

Finding the Right Job Candidates

Hiring Managers, you know that it can be difficult to find the right job candidates in this competitive job market. However, you know that hiring the right candidate enhances work culture and increases productivity so, you don’t want to settle.

Thankfully, you can use a few simple tricks and tools to help make sure that the right job candidates are applying.

Enticing and Detailed Job Description

Don’t just write a list of duties. Highlight a positive company culture that will catch their attention, followed by a detailed job description. Again not just a list. Include real-time experiences that they will be a part of.

Discuss Internally

As you look to fill a new position, it is important to understand what qualities have been successful within the company. Talk to different managers and employees to find out what they feel the best employees bring to the table. A good understanding of the specific traits that make for productive employees in this environment can help you target your audience more closely.

Employee Referrals for Job Candidates

Employee referrals can be a powerful tool for finding new employees.
According to the Society of Human Resource Management (SHRM), about 1 of every 2 employers offers a referral bonus program. It’s in an employee’s best interest to recommend people who are skilled and responsible candidates.

Use Tools

Look into an applicant tracking system (ATS) that can help you streamline the process. When programmed correctly, they will filter resume keywords so that only the job candidates who match your skill requirements make it though. Saving hours of reviewing unqualified applicant resumes.

Partner-up with an Accounting & Finance Staffing Firm. 

A top rated accounting and finance staffing agency understands the ins-and-outs of the accounting and finance candidate market and has a database of job candidates that they have vetted for you.

For more hiring tips, check out: Red Flag Personalities that Hiring Managers Should Avoid

auditing and accounting

Where Is Technology Taking Auditing and Accounting?

Technology is paving the way for the newest developments in auditing and accounting. It seems as soon as one cutting-edge concept is developed another one is already emerging. This type of advancement has not been seen in the industry in decades.

The Professionals Weigh In

The entire sector is interested in learning more about how technology influences the financial reporting industry. There is much to learn from professionals such as Ryan Teeter, Clinical Assistant Professor of Accounting Information Systems at the University of Pittsburg. His background in technology and accounting is the ideal vantage point to learn from.

Teeter says that many advances are due to hobby projects that are started by auditors. From there, it grows into a more complex system that is used throughout a bigger portion of the workplace or the industry as a whole. The most popular systems created are those that streamline and automate routine tasks.

Benefits of Automation

Not only does automation add an extra layer of value to the audit, but it has other advantages as well. Teeter says, “It also means that they’re helping reduce their workflow and their workforce because a lot of the routine tasks can be done by a computer as opposed to a staff accountant.”

There is always the concern that automation may lead to the need for fewer people. However, while automating some of the tasks could be beneficial and time-saving, there is still a need for human judgment and decision-making. The technology may be able to get the analytics, but there will still be a need for people to evaluate it.

Overview of Technology in Auditing and Accounting

We see technology become a helpful asset in auditing and accounting. It can be used to streamline some of the processes without totally disregarding the need for accountants and auditors. Technology should be considered a tool and not a replacement for the professional. However, it will be critical for professionals to learn and adapt to new technologies as they become more and more incorporated in the financial sector.  

For more audit related news, check out Current AICPA Guidelines on Prior Period Audits

Background Check Show to Employers

What Does a Background Check Show Employers?

Many of today’s employers choose to run a background check of potential employees before they offer them a position. These checks are generally conducted to ensure that everything that you put on your resume is correct, and to identify potential red flags about your history before you become a trusted member of their team.

What comes up on a background check can vary based on the amount of information a company is seeking. There are a few things to keep in mind that may come up in a background check.

Your Credit History

Most high level financial and accounting positions require a financial background check. Employers who are entrusting employees with managing income or budgets need to be assured that those employees can handle themselves financially. Financial background checks generally don’t list financial crimes of applicants. Financial crimes will most likely show up on the criminal background check. Instead, a financial background check assess a person’s financial responsibilities.

Generally, when an employer uses the term financial background check, they are referring to a credit history check. Employers will receive information such as highest credit extended, all credit lines, monthly payments, past due amounts, and percentage of credit still available. Additionally, civil suits, judgments, bankruptcies, collection accounts, and tax liens will be included in the credit history.

Employment History

Potential employers can also check to make sure that your employment history was accurate. This can include the dates of employment, what your roles and responsibilities were, and also references from previous supervisors. This means that it is important to keep your resume updated with current contact information for your references and that you should never lie or embellish about past employment.

Criminal Record

Employers will often check your criminal record as well. Criminal records can include driving infractions, misdemeanors, or felonies that are on your record. Some of the available information, or how old the information can be, will vary by state.

Google and Social Media

Many prospective candidates overlook employers looking them up and finding their social media accounts. This means that it is important to keep a professional appearance, even when it comes to your private social media accounts.

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Making Competitive Job Offers

Making a Competitive Job Offer

In this tight job market, it can be difficult to find skilled candidates. This can make it tempting to offer too much when you do find a candidate that meets your requirements. With that in mind we have compiled a few tips that will help you attract the right candidate with a job offer that is amicable for both you and the candidate.

Act Quickly

Today’s best job candidates don’t just put in a single application. Instead, they are diversifying themselves and shopping for the best fit. If you aren’t on top of your hiring game, your perfect candidate maybe be swept up before you even finish interviewing them. That being said, don’t delay. Respond quickly with a competitive job offer when you see a candidate with the skills that are important to you.

Listen to Their Needs

Getting a person into a new position shouldn’t be your only goal. Many job seekers are looking for a real career and a place that they can make a difference for a long time. Make sure that you find out what they want in a position and point out the ways that your business can make this happen. If you have attractive training and promotion potential, make sure to let them know about the opportunities.

Discuss Your Involvement

Making a personal connection and investment in a new hire and the position can be attractive for prospective employees. They want to know that you take an active part in developing them and their career. Detail the ways that you will help to coach and mentor this position.

Make Team Introductions

It is important that a potential employee can see how they fit into your organization. Team introductions can help build immediate relationships with a candidate and help them visualize who they will be working with.

Make a Competitive Job Offer

All of the legwork won’t mean anything if you are drastically under market value or not offering a benefits package. Detail all of the benefits of this position and don’t leave anything undiscussed. Sometimes the small things can end up being the difference in where a great employee decides to go.

Partner-up with a staffing firm. 

A top rated accounting and finance staffing agency knows the ins-and-outs of the accounting and finance candidate market.  They will have a database of job seekers, including those who you won’t have access to by checking the job boards.

Click Here for more hiring strategies to land your best employees.

Questions to Ask New Employees

Questions to Ask New Employees

In order to create a steep learning curve, make sure your new employees are orienting to their new surroundings and have a firm grasp of what their responsibilities are. Staying engaged with your new employees will help them to be efficient and productive.  Here are some questions that you should be asking your new employees during their employee orientation process.

Going Well Or…?

You should be looking for a few things in this answer. The first is to make sure that you are hearing the things that your employee enjoys. Additionally, you can see if the things that are going well match with your employee’s talents and with your expectations of the position. Questions about things that are happening well can also help to frame a larger conversation in a positive and constructive light.

Is This Position What You Had Expected?

It is okay if your employee didn’t expect certain things. Sometimes these variations can be positive, and you may even realize that you are covering areas that you hadn’t even thought this position was capable of. Additionally, this offers a non-confrontational avenue for the employee to bring up any issues that they are having in a constructive manner.

Do You Have Enough Time to Complete Your Work?

In the beginning of any new employment, you should expect and allow for additional time to learn tasks. Ensuring that you don’t overload an employee as soon as they start can help smooth the transition and allow them to give you some of their best work without adding additional pressure.

You may also find that if the employee has too much downtime that you can start to increase their workload, as long as their work has been satisfactory so far.

Are There Any New Employee Challenges I Can Help You With?

It is important to make sure to guide a new employee and give them the resources they need when they first start a position. Offering to help with specific challenges can improve your working relationship and offer your employee an avenue for help if they need it in the future too.

As new employees start a position, it is important to increase your communication and build a solid work foundation. These questions can help get you there.

For more new hire tips check out, Creating a Successful New Hire Orientation Program