Happy New Year! While 2018 officially began for us accounting scribes once the New Year’s Eve hangover faded away, a majority of accounting and finance departments celebrated the start of the new year several months ago.
Many companies’ 2018 fiscal year first quarters began last fall, but the process of planning key accounting and finance priorities, goals, and initiatives for the new year started way before then.
“Typically, after we close out Q2, we’ll start to have a clearer picture of goals we may have set for the second half of the year that are likely to trickle into the following fiscal year,” said Donavon Hall, controller of Apptio, a Bellevue, Wash.-based developer of technology business management SaaS applications. “As a result, we had some preliminary discussions in early Q3 of 2017 about 2018 initiatives, but that picks up in earnest in late Q3 and early Q4.”
I recently spoke to Hall and five other corporate controllers who shed some light into their process for planning 2018 priorities, their No. 1 priority for this fiscal year, and other key initiatives they hope to accomplish:
Name: Donavon Hall
Priorities planning process: “Late October and early November is when our finance team meets with every function to summarize budget requests,” he said. “In advance of those meetings, I met with the managers on my team to brainstorm on 2018 initiatives. I then summarized the items discussed during the brainstorming session and reconvened with the management team to prioritize the initiatives we believe we can, and should, tackle in 2018.”
No. 1 priority for 2018: Preparing for ASC 606 adoption. “Much of Q1 will be focused on finishing what we started in 2017 related to the adoption of the new revenue accounting standard,” Hall said. “ASC 606 requires a number of new disclosures and will change the way we account for sales commissions, so we need to build and implement new reports to address the disclosure requirements. We’ll be implementing a new module in our commission software to address the revised accounting for these expenses. In addition, there are a number of new internal controls that we’ll need to implement and test related to ASC 606.”
Other initiatives: Eliminating redundant data entry across multiple systems and improving SOX controls related to provisioning and de-provisioning users in Apptio’s financial-facing systems; and streamlining processes related to the company’s international operations, such as payroll and intercompany settlement.
Name: Mark Harrison, CPA
Company: Cubic Corp., a San Diego-based provider of systems, products, and services to the transportation and defense industries.
Priorities planning process: “We have a series of strategic and business planning meetings with both the CEO and CFO beginning midyear to update our strategic plan, set our priorities for the following year, and prepare for implementation,” he said. “This assures alignment of our priorities with the CEO and CFO. Our fiscal year begins Oct. 1, so we are already nearly through our first quarter.”
No. 1 priority for 2018: Completing implementation of SAP software for remaining businesses. “As part of the company’s strategic plan, we are in our second year of implementing SAP software, which should be transformational for the business,” Harrison said. “We have also begun the implementation of new planning software.”
Other initiatives: Implementing shared services plan; reducing days to close; decreasing cost of finance by finding process efficiencies; and reducing the number of legal entities—simplifying organizational structures.
Name: Jennifer Howard, CPA
Company: InnSight Hotel Management Group, a Springfield, Ore.-based hotel development and management services company.
Priorities planning process: “Our organization is constantly growing, and I feel that our team does a great job in evaluating what our needs are, based on this growth, and implementing a great plan to accomplish it in the most efficient way possible,” she said. “We began to plan for 2018 in August. We discussed the areas of concern that our accounting department currently struggles with and then came up with an approach to tackle them.”
No. 1 priority for 2018: Implementing a job-costing module within the company’s accounting software. “There are three hotels that are currently under construction, and a job-costing module will help give us a better understanding of where each construction project is compared to its budget,” Howard said.
Other initiatives: Automating process for intercompany billing; and improving cash flow forecasting.
Name: Bridget Meacham Kowalski, CPA, CFE
Company: Pittsburgh Symphony Orchestra
Priorities planning process: “Our offices are all within 20 feet of each other, and we rely on real-time communication in order to work. Because of this, priorities and initiatives are discussed on a regular basis, though the effort that goes into them ebbs and flows based on the workflow due to our operations,” she said. “Typically, our priorities don’t need outside approval—anything relating to finance, accounting, and internal controls is our domain. However, this year we’re discussing the complete reworking of a few processes, including the selection and implementation of new software. Those priorities that include major expenditures are discussed with the CFO and CEO if necessary.”
No. 1 priority for 2018: Saving the trees. “My organization has been very slow to embrace the digital age. Everything from timesheets to expense reports to donation documentation to invoices is kept in hard copy. So, I am leading the charge in implementing paperless document retention and workflow solutions,” Kowalski said. “With the time we gain from eliminating inefficiencies, such as copying, filing, and chasing down missing documentation, we can provide more value-added analysis for the organization.”
Other initiatives: Eliminating double entry of data; hiring a new employee; and empowering the PSO’s departments to help themselves.
Name: Robert Ott
Company: TE Connectivity, a Switzerland-based manufacturer of connectivity and sensor products for harsh environments.
Priorities planning process: “Our fiscal year ends on the last Friday of September, and I strive to have strategy, priorities, and goals defined prior to entering the new fiscal year,” he said. “I initiate this process in early summer with my leadership team. We spend a couple days analyzing feedback from our internal customers, along with brainstorming on priorities and goals for the coming year. This conversation leads to a refreshed or refined strategy/vision that guides the entire controlling team.”
No. 1 priority for 2018: Accelerating the utilization of shared services. “Shared services is a centralized organization that is responsible for providing certain finance services to the business,” Ott said. “Efficiency or productivity is achieved through driving consistent processes and leveraging the organization to perform the same or similar services that would have otherwise been provided locally. Further efficiency is often driven through better span of control, economies of scale, and potentially labor arbitrage.”
Other initiatives: Improving and simplifying controllership processes (Lean discipline); successful implementation of ASC 606 and continued preparation for ASC 842 (lease accounting standard); and developing talent to sustain and elevate capabilities.
Name: Craig Vaughan
Company: Sonatype, a Fulton, Md.-based software supply chain automation company.
Priorities planning process: “We have a phenomenal management team and board that understands the initiatives we have to put in place and the timing by which they need to be completed,” he said. “We then utilize that to plan, essentially creating an always-moving project plan—as one project is completed, another is added. Each project is then ranked in terms of priority based on a scoring system that includes effort and assumed return on investment. That scoring relays priorities. As a team, we discuss this pretty regularly given the fast-paced nature of our company’s growth trajectory and evolution.”
No. 1 priority for 2018: Preparing for ASC 606 adoption. “This was a key initiative in 2017 and will continue to be in 2018 until adoption in Q1 of 2019,” Vaughan said. “We’ve been in close discussions with both our auditor and an external firm we hired as consultants to go through the logistics process. We’ve come to some initial conclusions based on our product offerings, selected a software to implement, and finalized our project plan, which we’re kicking off in Q1. We feel we’re going to be more than ready to act on dual reporting, to weed out all the bugs, and to make sure everything looks appropriate, is streamlined, and is set for scale well before the end of 2018.”
Other initiatives: Continued enhancement of the company’s systems and platforms, allowing for more data that can create actionable intelligence in real time for engineering, marketing, and sales.