In Black & White (6)

How to use CaseWare's Filters to save time

James Goligher
Tips and Tricks
minute(s)In our Tips & Tricks blog series we highlight many efficiency-boosting techniques. Here is another one designed to save time. CaseWare Working Papers' document manager is a powerful tool that we have written about. The ability to drag & drop, sort, create placeholders and view sign-off/issues related to a given document, are just a few commonly used features that simplify and improve year/quarter/month end file preparation. Adding 100+ supporting documents is great, but it can make it difficult to find particular documents later. Fortunately, CaseWare gives us Filters to make this simple too! Filters allow you to hide those documents that are unnecessary at a given time. This ensures you see the information you need, exactly when you need it, without having to search through dozens of folders and hundreds of documents. Some examples of great use cases for Filters: To Be Reviewed List: Hide documents that are not ready to be reviewed yet (not signed off in all roles) Special Topic List: Only show documents related to the FIR / LGDE (filter on Tags) Problem Areas: Only show problem documents (have issues assigned that are not cleared) Task List: Only show documents for a specific user (filter on Tags) Outstanding Documents List: Only show supporting documents that have not been uploaded yet (filter on placeholders) Watch the video below to learn how to use and modify Filters in CaseWare’s document manager.

CaseWare Working Papers' allows the addition of extensive supporting documents. This Tips & Tricks post teaches creating & using Filters to increase efficiency.

The quick & easy way to import into CaseWare

James Goligher
Tips and Tricks
minute(s)To take full advantage of CaseWare's power to automate your reports, you must first import your data. There are numerous accounting software packages that CaseWare imports from directly. Even if your package is supported, however, we do not typically recommend you use the "Accounting Software" method. Instead, we advise using the "Excel File" import feature. Why? There are two key benefits: Consistency. Perhaps you work in an accounting firm and need to import from dozens of different accounting packages. Rather than learn different processes for each, you can learn just one - Excel. Data Integrity. Working with Excel you can review data and ensure it balances before you import. Many folks identify a drawback, however - speed. With Excel, users must specify numerous options before import, which can be both confusing and time-consuming. If that's your experience, this blog is about to save you that most valuable of assets, time. Most users don’t know about the ‘Record Layout File’ option. Simply put, it’s a way for you to automatically populate all options in the Excel Import Wizard. Making the import a 4-second process. No more identifying rows to be excluded, no more labeling columns, no more selecting advanced options every time you import. Instead define these criteria a single time, save a record layout file and apply it subsequent imports. NOTE - to take advantage of this process, you will want to have the Excel file in the same format every time you import it. So, it is best to find the right report in the accounting software, and export that same one every time. For more information on importing from Excel to CaseWare Working Papers, including a demonstration of how to get from import to draft Financial Statements in under 3-minutes, see our CaseWare Feature Spotlight: Importing Data blog.

There are many ways to import data into CaseWare. But, only one applies to all users, takes under 5 seconds, and can be reliably executed time after time.

How to prepare better RFP requirements lists for IT Success

Jamie Black
Efficient, Effective and Reliable
minute(s)Several of our recent articles have outlined IT project success factors and the significant rate of failures that have become commonplace. There are many causes for failure. First among them is choosing a solution that does not meet the needs of your organization. The Request For Proposal (RFP) process is ubiquitous. Everyone uses them because it seems logical; state your needs and ask vendors to supply a price to meet those needs. If you are buying a commodity with little differentiation amongst possible solutions, your RFP requirements list is important. But when buying an intangible like an IT solution that has unlimited variables and options, it becomes absolutely critical. Unfortunately, it is very common for us to see software RFPs for Comprehensive Annual Financial Report Automation or Continuous Controls Monitoring (CCM) systems with requirements: that are very broad, derived exclusively from a vendor's list of features, copied from another, theoretically similar organization's RFP. To see the error in this approach, imagine buying an expensive suit. After seeing it hanging in the store and being impressed with what you see, the next step is always to try it on. Why? It is the only way to guarantee it fits you. Even though the tag says it's your size, that is no guarantee of fit, is it? Take that suit home without trying it on and it might fit exactly (unlikely); it might need some alterations, or it might be completely wrong for your body. Why do so many organizations have such ill-defined requirements? The 3 most common causes: The team disagrees that implementing a new IT system is like buying a suit; it is more like the purchase of socks - one size fits all. The team involved did not have the time to formally document THEIR needs and felt that a good compromise is to take someone else's. The selection team did not have a clear idea of how to go about documenting their needs and so chose to exclusively leverage needs published by vendors or peers. How to document your needs In case you fall into the third category (above), improve your IT solution success with these seven steps: Document your current business processes. Start by writing down each step. Visit the people that perform each step and ask them what they do, in what order and why. Be prepared for some surprises. There will be steps you did not know about and people taking shortcuts you never imagined. The benefits of this documentation process can be more than just selecting the right new system. For example, it can be the critical first step to updating your internal controls risk assessments or developing updated training materials. Prepare diagrams of the process. There are many ways to create this material, but we firmly recommend you formally model your business process graphically. Business process diagrams (or models) are excellent at showing gaps in the process or errors in your understanding in a way that the descriptions you gathered in step 1 don't. We particularly recommend Swim Lane diagrams like this: There are many applications for creating these diagrams. The most commonly used is Microsoft Visio but we also really like Lucid Chart and Creately. Gather copies of any inputs (forms, authorizations, etc.) or outputs (reports) of your business processes as attachments to your documentation. Be sure to label the diagram to show where they apply in the process. Consider what could/should be improved: What is difficult today? What takes a long time with the current process? What would the value to the organization be if you could eliminate this time? Are all these steps necessary? Could we remove some of them and still achieve our desired results? Often these opportunities will jump out at you in the diagram. They may appear as many steps that loop back on top of themselves, for example. Create new diagrams of the optimal future process if you implemented the items identified in step 4 above. This improved process is really what you want your new system to support. Transform the steps in the business process into a requirements list. For example, if a step in your diagram is "Batch email Statement," the need might be "Ability to email statements to all accounts that have an outstanding balance without any manual intervention." Finally, now is the time to consider vendor feature lists or the needs documented in other, similar organizations to see if there are any items you have overlooked. With these 7 steps, the requirements list in your next RFP will be perfectly tailored to your organization, so you can find the solution that will provide the greatest value.

Follow these 7 steps when preparing your RFP list to ensure your next Comprehensive Annual Financial Report or CCM solution perfectly reflect your needs.

Improve your Internal Controls to Lower Audit Fees

Jamie Black
In Control
minute(s)If you're a typical finance department, discussions about Internal Controls are probably not part of your daily work day. In our experience, accounting teams start thinking and discussing Internal Control when they have: found an alarming incidence of error in their business processes are subjected to a performance audit (if they are a local government) heard of another organization falling victim to fraud Outside of these scenarios, the strength of internal controls systems doesn't often get a lot of finance's attention while they take care of payroll, budgeting, management reporting, financial reporting and so much more. There is a large, but often overlooked reason to focus on your internal controls system, an opportunity to reduce audit fees. Audit Fees Increase with Poor Internal Controls Poor internal controls and/or poor documentation of existing controls directly lead to increased audit fees. Why? Auditors must increase the amount of testing performed (sample size) when they determine that internal controls can not be relied upon (International Standard on Auditing - 530 Audit Sampling) to reduce audit risk to an acceptable level (International Standard on Auditing - 330 Auditor Responses to Assessed Risk). Specifically: "Deficiencies in the control environment, however, have the opposite effect; for example, the auditor may respond to an ineffective control environment by: • Conducting more audit procedures as of the period end rather than at an interim date. • Obtaining more extensive audit evidence from substantive procedures. • Increasing the number of locations to be included in the audit scope. The evidence of this direct relationship between audit fees and internal controls abounds. In December 2016, the Financial Executives Research Foundation (FERF) survey of more than 6,000 organizations found that reviews of internal controls continue to be one of the three major driving factors behind rising audit fees: More than 20% of the respondents that had audit fee increases cited a “review of manual controls from [Public Company Accounting Oversight Board] inspections.” Companies that cited ineffective internal controls as adding to audit fees experienced a 5.1% median increase, almost two percentage points higher than the median increase for all other filers. 3 Recommendations to Reduce Audit Fees In their follow up article "Mitigating Increases in Audit Fees" the FERF interviewed preparers and auditors to understand causes and develop recommendations. Several recommendations focused specifically on Internal Controls improvements that drive lower audit fees including: Align key controls with key risks: Ensuring the organization has strong controls to address the most significant risks will give management and auditors increased confidence. Document internal controls: If an organization has very light or poorly organized documentation, or hasn’t thought through all the branches in a process, attestation becomes difficult for the auditor — and more costly for you. Evaluate the latest technology: External and internal auditors are both using data analytics and continuous controls monitoring technology to increase audit quality, work smarter and potentially reduce costs. There are many great reasons to focus on improving your organizations' internal controls. Lower Audit fees is another good one.

Finance professionals know the importance of strong internal controls for managing but overlook the opportunity to reduce audit fees.

7 Steps to Avoid the Cheap IT Solution Selection Trap

Jamie Black
Efficient, Effective and Reliable
minute(s)Given that we continue to hear about IT projects failing at an alarming rate (according to some surveys, more than 50% fail), there are a lot of topics that we could discuss respecting the selection and implementation processes. We have discussed a number of them but there is one trap we see all the time. Price Clouds Everything Consider the Canadian government's recent Phoenix payroll software debacle. They elected to have a payroll system custom developed by IBM and have had nothing but problems with it. According to one assessment: "... the Harper government put so much emphasis on saving money that it undermined efforts to ensure that the system would function well....instead of saving the government 70 million Canadian dollars this year, as promised, Phoenix has cost the government an extra $50 million (about USD$ 37 million), including $6 million in additional fees paid to IBM to fix it." When participating in an IT system evaluation and you find your team leaning toward the low-cost choice instead of the high-value solution: beware. No one wants to pay more for something than they need to. In particular in government, you may even have the obligation to choose the low-cost solution. This default preference/requirement is understood by the IT solutions sales representatives and is often relied upon to accelerate the sales cycle and "close the deal." Even if you're not being exploited by sales teams, the Phoenix case shows how this low-cost bias can lead to dysfunction. Here are two questions to ask yourself to avoid a bad deal when considering the "cheap" IT solution: 1) Is it truly cheaper? In one respect it is obvious; if the number at the bottom of the RFP response or quote is lower, then it's the less expensive option. While technically true, that is only a valuable assessment if you are comparing apples to apples. Before you look at the price, you need to know that you are getting the same thing for the money. With an intangible like software, it can be difficult to ensure you make an apples-to-apples comparison. If you bought the Chevette above based solely on the price, you could be stuck with the wrong car if acceleration and top speed are necessary. Alternatively, you might say I do not need a Corvette, that Chevette will do. The point is, they have different abilities and merely comparing on price hides those differences. RECOMMENDATION: Before assessing products, explicitly and formally define your needs/requirements and evaluate your choices based on fit first. Don't allow the price to hijack the process. Use ROI instead of price to select among solutions that fit some/all of your requirements. 2) Why is it cheaper? There's no such thing as a free lunch. - Milton Friedman You've assessed fit first. Then you calculated ROI and the cheap solution comes out on top. What now? RECOMMENDATION: Treat the low-cost solution with extreme suspicion. This is your warning sign to increase your due diligence. We are currently watching one such "low-cost" vendor in the reporting automation industry cease operations and advise their existing client base they are on their own. For some of these folks, this is happening DURING their implementation of the software. The Action Plan - 7 Steps to Better Due Diligence Double check fit-assessment. If you have any doubt, have the low-cost vendors re-demo to confirm they meet your needs. Double check standard pricing variables: modules/features, number of users, number of people being trained, duration and extent of the support period, These are all variables that might account for significantly reduced cost. Remember you want to compare apples to apples. Also, recall that skimping here may cause cost overruns later when you determine you did need more training or more support. Assess the vendor track record. How many clients do they have? How many times have they solved the problem(s) you have? Ask about failed implementations and what causes their implementations to fail. Be suspicious of anyone who says they don't have any. Closely assess their implementation team. Does the vendor have in-depth knowledge of not only the tool but your business process? Have they been "on your side of the table"? Have they been an HR manager or comptroller or auditor or finance officer and done the tasks that their tool addresses? Contact numerous clients that are currently using their product. Spot check the specific features you are counting on using to see if the reference is using them. We have seen vendors provide references that did not even use the product being evaluated! If the vendor can not provide an extensive list of clients who use the product, or they do not have extensive experience solving your exact issue, determine if your organization is prepared to be a Guinea Pig. We have encountered numerous organizations that have been stuck in limbo for years while their vendor tries to build what was promised. Go back to the expensive vendor(s) and ask why they are so expensive. Do they charge a premium because of their brand? Did they consider something the others didn't? Was there an error in one of the pricing variables (point 2 above)? Assess the low-cost vendor's stability. One way to do this is to consider their financial health, if possible. If the company is publicly traded, have they ever shown a profit? Do their financial statements look like a stable, successful company? Now, if the vendor provides their software as a service (SAAS) there are (arguably) some other considerations when evaluating performance. You can find some interesting articles on SAAS performance here and here. If the company is not publicly traded it can be hard to do this analysis, and you may need to rely on 1 through 6 above more heavily. Many of the steps outlined above are a great idea even when there is not a major pricing disparity. They become absolutely essential when it seems like there is a great deal to be had, and you want to avoid the cheap solution trap.

During selection of a new IT system beware of defaulting to the low-cost solution. 7 easy steps steer you away from project failure.

How to Improve IT Project Success with One Calculation

Jamie Black
Efficient, Effective and Reliable
minute(s)Information Technology projects are some of the most complex and high-profile that you will encounter in your professional life as a finance department team member. Perhaps you have read about the trouble of the new Phoenix payroll system being implemented by the Canadian public service. Maybe you have direct experience with severely compromised IT investments where you work. There is no shortage of examples. So, what can finance do to help? In October of 2016, the Auditor General of British Columbia made some suggestions when they released their report "Getting IT Right: Achieving Value from government information technology investments." The Report in 60 Seconds Regardless of your industry, it is a valuable read for accountants, and we recommend reading the full report. In case you don't have time, here is a quick summary of the major points: IT is important because "every aspect of government depends on IT." Only 29% of IT projects globally are rated "successful." Success defined as: On Time On Budget AND Value Success depends on: People Planning Consultation and Governance The report is an absorbing read, but it fails to elaborate on a significant element: What is "Value" and how do you calculate it? What about "Value"? The report uses the word "value" 57 times with no explicit definition. The only comment on how to achieve it is to assess: alignment of the project with the organization’s specific needs, priorities and strategies contribution to the organization’s desired outcomes cost the level of risk While these are good points, they provide no particular direction to those attempting to assess the possible value of a project or measure the success of a project during implementation or after completion. ROI to Assess Value Before & After Perhaps it is just that we believe that numbers are the key to all universal truth (no really, we do), but we argue that finance should calculate proposed and achieved value for IT projects. The accountant in us is likely very comfortable with Return on Investment (ROI) calculations: This type of calculation should be used to determine the optimal use of your organization's investment. But our experience is that these calculations are rarely utilized when considering IT solutions, particularly in the public sector. Why? There are at least two problems with the word "Profit" in the context of Public Sector IT projects. Public Sector organizations typically do not think in terms of profit. Even if you work outside of the public sector, you may reasonably ask, "How does an ERP system (for example) generate profit for any organization?" Thus, profit (and therefore ROI) seems like a non-starter. But with a minor change in terminology - replace "profit" with "calculable benefit" - the concept retains its applicability to the public sector. The "calculable" part is important; you don't want this exercise to dissolve into imprecise speculation about intangible benefits. Those may also warrant a discussion, but you should not give up the important quantitative analysis. You should focus on those aspects to which you can assign a real dollar value. There are two broad categories of calculable benefit that you should consider: Efficiency of Staff Resources Your staff spends their entire working lives involved with IT systems. A more efficient, convenient, and highly automated solution will help them do their work faster, more reliably, and with less cross-checking and manual review required. If you estimate the hours saved that a new IT system might enable, and multiply it by your staff's hourly cost, you can measure the economic impact of those time savings. Reduction or avoidance of Direct Expenses There are many direct expenses which a new IT system can help to reduce or eliminate. You pay fees to an external accountant - would it reduce fees if you automated a significant portion of the work they performed? What if your new system could help to avoid late payment of invoices and thereby reduce your late fees and penalties to vendors? Perhaps a new system would provide a reduction of ongoing annual maintenance and support costs? An Example Consider the scenario where your current ERP system is no longer supported. You determine that the risk level of continuing with an unsupported system is unacceptable. You have identified three possible solutions and are working through the selection process. You have seen demonstrations and received fee estimates. You have contacted references and determined they each have strengths and weaknesses. Clearly, there are many considerations (some of which are intangible). But don't underestimate the value of performing an ROI calculation. Calculable Benefit: How much money will we save with each solution? For example, estimate the following separately for each solution: Hours of staff time saved by reduced data processing. Hours of staff time saved by automating report creation, Estimated late payment fees to vendors avoided due to improved A/P processing abilities. Decreased finance costs due to accelerated AR collections. Cost: What is the cost of each solution including all features/modules etc. necessary to facilitate the above benefits over a 5 or 10 year period. 3 Advantages of this Approach 1) Forces Detailed Assessment: All too often we see clients that have only a general understanding of how a particular system will help them. Vendors often don't do anything to help except provide marketing double-talk; "Work Smart", "Improve Productivity", or "Improve Efficiency". These aspirational comments are great, but you need measurable results. 2) Easy Comparison of Alternatives: You can immediately begin to see some interesting relationships between the options that were hard to see at first: Solution 3 is four times as expensive as Solution 1, but it provides 4.5 times the value. If all else is equal, and the organization can find the $100,000 budget, Solution 3 is the better choice for your organization. Solution 2, while more expensive than Solution 1, it does not provide a commensurate increase in benefit. Thus, if the budget did not allow for $100,000 investment, the next best option is Solution 1. 3) Clear Monitoring of Performance: Another advantage of this approach is that your team has very specific, measurable goals to monitor the project and assess success. For example, you estimated a calculable benefit value based on specific time savings in report creation and data entry. These time savings should be measured to see if you got the benefit. Moreover, if your vendor is confident in their abilities to deliver these time savings, you can attempt to include attainment of the advantages into the contract. The AG-BC included in her report this clear statement of the importance of measuring value: "IT-enabled projects aren’t just about technology – they involve substantial changes to an organization’s culture, business processes and customers. These projects are really IT-enabled business change. A successful project improves services and allows for more effective use of taxpayer money. And, their success or failure is about more than just being on time and on budget, it’s also about achieving expected value." Carol Bellringer, FCPA, FCA Auditor General The ROI calculation is an important tool that finance department staff should use to estimate, measure, and demonstrate the value of their IT project.

From replacing your ERP to implementing a new payroll system we illustrate just how powerful ROI is for setting & measuring IT project success.

How to improve CaseWare performance by 20%

Darryl Parker
Tips and Tricks
minute(s)During our introductory CaseWare training sessions, we focus on the fundamentals. To move users beyond these basics and ensure an even faster year end, we regularly provide CaseWare tips & tricks in this blog series. Our advice in this article is simple: eliminate unnecessary groupings from your file. It nearly always means better performance and less confusion! Why Purge? Why should you care about cleaning up (purging) your mapping and grouping codes? You want as comprehensive a grouping structure as possible - initially.That way you know you have an appropriate location for every G/L account. Once you have grouped all your accounts though, a typical file will have a large number of groupings that are not necessary. Those unnecessary groups slow down the file. They also slow you down, as you have to scan through long columns full of zeros and determine whether they are noteworthy. $0.00 of "Fishing Revenue" might be expected for your statements, but what about $0.00 of Account Receivable? That's why purging the map numbers or group numbers in any file can be a significant improvement. It moves the file from a generic setup to one tailored exactly for this year-end. In large, complex files we see dramatic results: Opening large financial statements: up to 10% faster. Opening group assignment window: up to 10% faster Opening grouped lead sheets and trial balances: up to 60% faster. In one of our large IFRS client files, cleaning up the groupings resulted in a more than 20% improvement in speed across a simple set of tasks (opening the file, reviewing the consolidation and mapping, and looking at automatic documents and the financial statements). Note - in a very simple file, the speed improvements may not be noticeable but the benefits of a file that is easier to navigate remain. We’ve posted recently about the standard Mapping Purge feature in CaseWare Working Papers. Read that article for an understanding of the built-in features, and then get ready for a more advanced map purge that addresses the limitations of the standard one. The Advanced Purge tool Perhaps you tried the regular map purge in your own Working Papers files. Or maybe you read about the problems that the built-in mapping purge has (can only work on mapping, cannot check account assignment, required knowledge of dBase filters) and thought it was not a good fit for your organization. We want you to be able to quickly and easily clean up the unneeded grouping numbers in your file so you have an even faster year-end. So, we built a tool to allow you to do just that. And we are providing it to CaseWare users for free. The Advanced Purge Tool will: Allow you to choose any of the mapping or 10 grouping structures to clean up. Never delete a map/group number with any adjustments related to it. Never remove a map/group number with any account allocated to it or any of its child map/group numbers. Check three years of historical balance data to determine if prior year adjustments should preclude deletion of a map/group number. Allow you to choose whether calculated map numbers should always be saved, or should apply the balance-checking logic to them. Define a “root” or “base” map number length that will not be deleted under any circumstance. BEFORE YOU START - A Word of Warning!!! The Advanced Purge tool will delete group numbers out of your Working Papers file, and there is no undo button. You must take a backup before running a purge. Even better, take a disposable copy of your file and thoroughly test a purge and verify its effects before running it in your live file. And even then, you should take a backup of that live file in advance of running your thoroughly tested purge! To use the tool: Download the tool. It is a compressed (Zip) file so you will need to extract it after downloading. The tool is a single CaseView document. After extracting, drag and drop this document onto the Document Manager of the file to be improved. Launch the CaseView document. Confirm you understand the risks of purging groups. Choose the grouping mechanism from which you wish to eliminate zero balance. Choose what balance type to examine for balances and if Other Basis entries should be considered. Specify if you want to keep calculated group numbers. Specify if you would like to keep base group numbers. If selected, you must also note how many digits are represented in your definition of a base group number. Once completed, select Perform Purge. When finished (it may take awhile), you will get a confirmation of how many unused groups have been eliminated. You can get a copy of the tool to see how it will simplify and streamline your own data files. All you have to do is click the image below! Consider our more advanced CaseWare training if you want your CaseWare Black Belt!

Our tip in this article is simple: purge unnecessary groupings from your file to improve CaseWare Working Papers performance by up to 20%

CaseWare Feature Spotlight: Diagnostics

Darryl Parker
CaseWare Feature Spotlight
minute(s)CaseWare's financial reporting solutions provide massive benefits to finance professionals. How? By providing the most sophisticated features in the industry. We've developed this article series to outline many of these features to: help prospective users appreciate all of CaseWare Working Papers' power, and encourage existing users to maximize their utilization of the software. "Tick & Tie" for hours & hours All of us know the pain of manually footing and cross-footing and cross-checking a large financial report. It's time consuming and the risk of error is significant. Even worse, as soon as you have an adjustment or update to the numbers, you've got to do it all over again. That's why the ability to automate the diagnostic tests for correctness in your reports is so important. One professional we respect greatly (Joy Richardson) explains the power of this feature set as follows: In addition to making the import of data simple and providing tons of grouping flexibility, Working Papers allows the user to define and enforce rules about their data. We have already discussed one example of this; Automatic Rounding. Diagnostics is a broader - and in some ways, a more powerful - feature that users can and should take advantage of. Rules-Based Data Management When data is imported, we define the nature of accounts that have been imported. This is done by assigning group codes to each account. CaseWare's understanding of accounting principals allows it to perform validation and testing of the resulting financial reports. For example, when we assign an account to a group called "Allowance for Doubtful Accounts", CaseWare is able to automatically determine: this account belongs on the balance sheet (or statement of financial position if you prefer), normally the balance is a credit, this account should be netted against our Accounts Receivable accounts when we present A/R Net of Allowances, If I define these as rules within Working Papers' groupings, Diagnostics will monitor my data and find any examples of where these definitions are violated. What happens if someone modifies these assignments? As you see in the following clip you will be notified: Working Papers also notifies end-users of common issues that might occur inside your reports: Finally, Working Papers' Custom Diagnostics feature allows end-users to define their own rules within their reports - without the help of a programmer! If these rules are broken, you will know about it immediately: Diagnostics are another example of the features that enable CaseWare users to dramatically reduce the time spent on the creation of complex reports while eliminating errors.

CaseWare's diagnostics significantly reduces time spent to generate CAFRs, annual financial statements, budget books and other complex reports.

Is Self-Implementation right for you?

Jamie Black
Efficient, Effective and Reliable
minute(s)In order to make the most of tight budgets, efficiency is key for government finance officers. The RIGHT tools and technology can aid significantly with improving efficiency. This is of course assuming you can fit that technology into your tight budget. Many of our clients are looking to find ways to implement technology as inexpensively as possible. For some tools, this can mean self-implementation. How do you know when this approach is right for your finance or budget department and when it is a mistake? This article examines the criteria that determine if you are likely to be successful self-implementing a particular new finance-related system (ERP, payroll, Comprehensive Annual Financial Report or financial statement automation etc.). Over the last 20 years we have implemented hundreds of technology solutions for clients: Comprehensive Annual Financial Report and financial statement automation systems, custom designed mobile applications, ERP systems, local and wide area networks, servers, and of course continuous monitoring systems. During the course of these implementations I think we have tried every possible model: 100% delegation of implementation tasks to client's staff 100% retention of implementation tasks by our team Every task-sharing split possible We have had major success with each of these options. Frankly, we have also had some disappointments. This has given us a wealth of experience and allowed us to come up with the following guidelines for determining which approach to take. Self-implementation Requirements: When you engage consultants / vendors to help with the implementation, there are really two major benefits that they provide: relevant expertise and time to dedicate to the project. As you consider if your organization can self-implement a particular system, assess your team to see if you have the "right-stuff" in these categories. 1) Expertise: An objective assessment of your team's expertise is critical to ensure you are capable of taking on the implementation yourselves. Technology: The initial configuration of some systems require considerable technology knowledge that is not necessary for their day-to-day operation. Server setup, database configuration & optimization, custom code for integration with existing tools are some common areas of required expertise. Do you have team members with this expertise already? If not, you should carefully consider whether it is a wise investment of your time and money to develop this expertise internally for the self-implementation project. On the other hand, some systems do not require this sophisticated technological expertise about the support systems. All that may be necessary is strong knowledge about that particular application and its day-to-day features. In some cases, a strong user of Microsoft Windows and Microsoft Office could have all the technological expertise required for a self-implementation project. Questions for the software vendor: What technology does your system rely on? Are there servers to set up or databases to administer? Is there any programming or scripting required to implement this system? Specific subject-matter: Subject-matter expertise depends upon the system you are implementing. If you are implementing a new ERP system, are you expert in the functioning of your current system? Have you worked with many different systems? Have you ever been responsible for administering a new ERP system? If you are considering self-implementing a year-end reporting automation tool (Comprehensive Annual Financial Report / financial statements), does your team have a lot of experience preparing these reports today? Do you understand how these balances come together and know what G/L accounts get grouped in each number on your statements? Or is this your first year-end and you do not have any support from the people who prepared prior year reports? Questions for the software vendor: What subject-matter skills do you require of your implementation consultants? What experience is essential for a successful implementation? When you have seen implementations fail, what skills were missing from the implementation team? Project management: The size and complexity of the project will determine how sophisticated your project management skills will need to be. For example, if the project requires collaboration from a large team over many months / years, with many individual milestones, lots of complexity and great risk should the project fail, you want a very seasoned, professional project manager. On the other hand if the project will only involve one or two people, is reasonably straightforward and you have a great fall-back plan in the event of delay or failure, basic skills may suffice. At a minimum we recommend candidates who have good attention to detail, strong organizational and communication skills. That might be sufficient to guide the self-implementation of some systems. Questions for the software vendor: How long and complex is a typical implementation project? Do you offer project management services if we deem it necessary? What guides or checklists can you offer us to assist in managing a self-implementation? 2) Staff Availability: One of the many reasons organizations pay for professional implementation is not due to a lack of expertise but a lack of available staff time. Being short-staffed or just overloaded with work likely means that you will not be able to prioritize the implementation tasks and you will wind up with a system that is never fully / properly implemented. For many systems, considerable time is required to successfully implement the tool. The tasks may or may not be complex from either a technology or subject-matter perspective but, they may take considerable time. You need a clear understanding of both how much time is required and how much time your team has available. Consideration should also be given to how frequently you will need to break-off from the project to tackle your other duties. The more frequent the interruptions, the more difficult it will be maintain momentum, remember training etc. Questions for the software vendor: How much time would you allow for your consultants to implement this system for our organization? How much more time should we allow given we do not have your experience? Should we multiply the vendor's time estimate by 2? By 3? Measure Your Options As you obtain answers from your vendor, score and plot the responses on a graph like the one pictured here. Projects that fall into the green zone are obvious "self-implementation" candidates. If you plot your project in the yellow or orange zones, it becomes apparent that the demands of the project are higher and careful consideration of your availability and / or expertise is warranted. Should you determine that the project falls into the "red zone" it usually means that it would be wise to abandon self-implementation and investigate other options. Joint Implementation This is not an all-or-nothing decision between self implementation and fully outsourced implementation. Another option to consider is to share the workload with the vendor in a joint or guided implementation. You may be able to do major portions of the work yourselves which will yield significant fee savings and make use of their professionals' expertise and time strategically. Use their team to provide oversight, to remedy any expertise weaknesses or to supplement for any resource availability issues you may have. By balancing the use of your time, your expertise, and your budget for external services, you can often develop an implementation plan which provides the highest return on your technology investment.

To implement technology as inexpensively as possible many governments consider self-implementation. How do you know if this is right for your organization?

Lipstick on a Pig: 6 Spreadsheet-based Financial Reporting Tool Flaws

Jamie Black
Automating Financial Reporting
minute(s)You may be familiar with the expression "Lipstick on a pig". Variations of the expression date back nearly 130 years but the meaning has not changed; Superficial improvements that do not change the underlying nature of something. Spreadsheets by any other Name We have seen an increasing number of spreadsheet-based reporting automation tools promoted as ultimate solutions for Comprehensive Annual Financial Reports & Budget Books. This is ironic considering many organizations are using spreadsheets today and are looking for a better approach. Sometimes these solutions are desktop add-ons to enable better connections to a source of data. Sometimes these are cloud-based solutions that rely on spreadsheets to maintain their data and develop their reports. Hard to Tell They are Spreadsheets The fact that these are spreadsheet-based tools may be hard to tell on initial review. You can spend hours reviewing their websites and sitting in presentations and still not recognize it. It's not surprising they don't advertise their reliance on spreadsheets given the scientific evidence of their weaknesses and the numerous stories of very public disasters caused by spreadsheets. The Lipstick In fairness, these tools often have improvements over the desktop spreadsheets you are used to, such as: Better collaboration abilities for sharing comments, tracking changes or assigning tasks. Better audit trails and change management. Ability to tie supporting documents to a given value / cell. More granular security / permissions. The Pig But the core of these products are still spreadsheets. That means they suffer from the traditional spreadsheet weaknesses: No database - All data resides in spreadsheets / workbooks not in a database. This means you must build all your own personalized systems to: ensure your G/L balances identify the 100 - 1000 new G/L accounts added each year No processes/workflow - There is no structured system that you can leverage to support industry best practices. What steps should be followed and in what order? You must develop all of these processes on your own and maintain them separately from your reporting environment. No grouping mechanisms - The G/L accounts that sit in your spreadsheet must be summarized in numerous different ways (by object, by fund etc.) to power your Comprehensive Annual Financial Report or Budget Book. If you use spreadsheets, formulas must add the right accounts together. This is fragile and susceptible to error. Moreover, unless you interrogate every formula, there is no way to know what is being included in a given number; there is no legend. Assuming you do get this right in year one, all the new accounts next year means these formulas must all be updated. Tons of custom formulas - All values are derived by "linking" - which is to say writing spreadsheet formulas of varying complexity. Any mistakes you make means errors in your report. Consistency in how these formulas are written or maintained is entirely dependent on the user's expertise, accuracy and completeness. No content libraries - Reporting standards are continually evolving. There are new GASB pronouncements all the time and keeping up with them and what new statements, schedules or footnotes are required this year can be daunting. Spreadsheet solutions do not come with any content. It is entirely up to you to figure out what must be presented and how. No adjusting journal functionality - Adjusting or changing balances is an absolute requirement for financial statement /Comprehensive Annual Financial Report production. In spreadsheets you are left with no tools for the following: The values in your G/L are typically maintained on a modified accrual basis. For many of your statements, you need full accrual. Debit balances in A/P accounts or credits in A/R are just two examples of balances you need to reclassify. Prior year adjustment / restatement caused by changes in accounting policy. Our message in this post is not that the additional features - the "lipstick" - have no value, or that there is no situation when spreadsheets should be used. We are saying that when finance & budget officers evaluate possible solutions for their most complex reporting tasks (Comprehensive Annual Financial Reports & Budget Books), they must exactly match the critical requirements of their processes to the solution's abilities. If they do this carefully, they will find that spreadsheet-based "solutions" are only marginally better than their own collection of desktop-based spreadsheets.

Comprehensive Annual Financial Reporting and Budget Book tools based on spreadsheets are all the rage. Don't overlook their considerable weaknesses.

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