Year-end is a stressful period for even the most talented and well-organized CFOs. Whether it’s gaps in revenue relative to the forecast, a deteriorating cash or DSO position, or open issues remaining from past audits, managing and controlling the budget during the final months of the financial year is a challenging task. And a lack of adequate resources makes the situation much more difficult.
According to a Robert Half, a recruitment consultancy agency, use of temporary accounting staff to cover busy periods of work, including fiscal year end, is now part of normal business practice. Nearly two-thirds (64%) of CFOs/FDs planned to engage temporary staff to help manage their 2013 fiscal year end.
I find this to be a surprisingly high number and would question whether the finance leaders employing the temporary staff are satisfied with the efficiency and effectiveness of their work. Having additional resources during the busy year-end period is one thing, but to what extent are they helping the organization achieve year-end targets?
I’ve worked with a number of finance organizations during the final months of the year and often see similar areas that require improvement, including:
- Realizing unbilled revenue
- Overcoming order fulfillment issues
- Eliminating duplicates for cash and margin enhancement
- Collecting overdue receivables and improving cash position
- Optimization of stock levels
- Clearing backlog affecting multiple areas
Given the right structured approach, best-practice processes, and teams that have the necessary tools and experience to analyze the data, it is possible to diagnose and implement improvement measures that will have an impact by year-end. And now is the time to get started!
A typical timeline begins about two, ideally three months prior to year end:
In one case, the BPO team that I was leading helped one of our manufacturing clients implement improvements that made a difference during the year-end crunch. Shortly after the integration of a newly acquired business, the year end came as a challenge. Thanks to the effort, the team performed the diagnosis and quickly mobilized to not only address the pile of outstanding items from the integration but more importantly improve outcomes in the areas of profitability and working capital.
Year-end is quickly approaching and those who act now have a better chance of increasing cash, minimizing revenue leakage, achieving a more favorable audit opinion and cleaner balance sheet … and equally important – a more peaceful year-end.