It’s time to get back to the basics of accounting and finance. The past few years have been anything but typical. We had a global pandemic, unprecedented government stimulus, supply chain challenges, crazy high demand for certain products and services, record high turnover, and many employees working remotely for the first time ever.
The impact from these events hit our services, including accounting and finance, in ways we did not anticipate. This combination of events led to some surprising results including a breakdown in the basics of accounting and finance such as reconciliations and cash application. Reconciliations and cash application are the required building blocks of accounting and finance and key components for accurate financial statements and meaningful forecasts. When accounts are not reconciled and cash is not applied correctly, the accuracy and reliability of all accounting records and financial reports are negatively impacted.
As these problems snowballed, the ability for internal teams to deal with the volume and complexity became increasingly difficult and sometimes impossible to address. Grandin identified this trend early last year as multiple clients reached out looking for teams of consultants to help deal with these backlogs of reconciliations and unapplied cash.
Our approach to assist with these initiatives typically includes these steps:
This approach paired with dedicated consulting resources who possess a variety of accounting, finance, technology and controls skills and expertise brought these backlogs back under control. We may never see this combination of events again. However, it has provided an excellent opportunity to learn what can go wrong and a great reminder to take care of the basics of accounting and finance with items such as account reconciliations and cash application.
If you would like to learn more about this trend or how we assist clients, please reach out here.