Day: February 23, 2018

For companies reporting under International Financial Reporting Standard (IFRS) and public companies reporting under U.S. GAAP with fiscal years ending December 31, the rubber is about to hit the road.

All of these companies worldwide must be prepared to implement the new accounting standard on revenue (IFRS 15 for IFRS, ASC 606 for U.S. GAAP). Regulators want detailed disclosures on the expected impact of the IFRS 15/ASC 606 in the notes to the 2017 full year financials. The numbers in the first interim report, which may be due as early as April 2018, must be based on the new standard.

The big question on everyone’s mind is, “Are we ready?”

Strictly speaking, “ready” means being able to determine and disclose required numbers and explanations by the deadlines set by regulators, and ensuring that these numbers are materially complete and correct. But in practical terms, “readiness” appears to be a relative term. In my talks with my fellow chief accountants working in various industries around the world, it’s clear that everyone’s done something to prepare – but the continuum is vast, indeed.

Varied Levels of Readiness

A few companies are lucky enough to say that the new standard does not bring significant changes to their accounting numbers and processes. Of those not part of this small group, some have invested heavily in automation to maximize efficiency and effectiveness and minimize risk. They are ready for long-term compliance with processes that limit the strain on their already overtaxed finance team. Others have pieced together a patchwork of systems, manual processes and controls to get to IFRS 15/ASC 606 numbers, minimize errors and declare readiness. This may be all they can do, given the time and resources available to them. And it may get them through the first few quarters, if all goes well. But that’s a big gamble.

As someone who is intimately familiar with the new standards, I would suggest that manual, piecemeal approaches are not only risky. They are also not sustainable – especially as new requirements come into play and increase the challenge. For example, new leasing standards come into effect January 1, 2019.

Sustainability is vital for two reasons: First, IFRS and U.S. GAAP requirements are complex, here to stay, and can have significant business ramifications. Even accidental misstatements can result in costly shareholder lawsuits, stock hits, and damage to brand reputation. Second, accounting functions are expected to work efficiently, and manual processes are often the biggest enemy to efficiency and cost containment.

Ideally, companies that cannot immediately move to sustainable processes should take a two-step approach, with the initial step focused on achieving compliance using interim processes. These processes are subsequently replaced during the second step by more efficient, automated processes. This approach works only if the second step does not drift out of focus over time, of course.

An Opportunity for Your Company to Run Better, Smarter

By using the right information technology, accounting teams can make compliance sustainable — and help their firms run better and smarter. To do this, chief accountants need to view the impacts of the new accounting standards as more of a business change, not just an accounting change, and proactively identify what can be improved upon.

This is what we’ve done at SAP. As a company with a December 31 year-end financial cycle that reports quarterly, along with countless other firms, SAP is not just looking at what has changed due to the new standards. Rather, we’ve used the new accounting standards as a catalyst for reconsidering all processes in the respective accounting areas — even those processes that are not affected — and making improvements to benefit the entire business.

For example, we have been striving for comprehensive use of the new revenue and lease accounting functionalities that SAP solutions offer, as well as expanding our use of treasury functionalities to cope with the new requirements for financial instruments accounting. And we’re leveraging new technologies like machine learning to further streamline core finance processes.

Want to learn more? Check out this new video where I talk about
how SAP is turning the challenges of compliance into
opportunities to improve our business.

Christoph Huetten is senior vice president and chief accounting officer at SAP http://bit.ly/2EMi2TQ #SAP #SAPCloud #AI

Owning an online business gives you the opportunity to do stuff most people can only dream about. If you’re a parent you might want to take your kids traveling. Make life easier on yourself and you’ll be able to spend more time with them.

There is certain technology you won’t be able to live without. It’s unlikely you use it at the moment, so you might not know it exists. We’ll take a look at the main tools you’ll need to set up if you want everything to go smoothly.

1. Receiving Your Mail

All the mail will be sent to your home if you don’t do anything about it. Sign up with a mail forwarding company and make sure everything finds its way to them. Once you receive mail they’ll scan it onto the computer.

It will then be forwarded to you by email within hours of them receiving it. Sometimes you’ll receive physical packages in the mail. You can have them sent to an address of your choosing depending on where you are.

2. An Action Camera

Do you take your own photos and videos for the business? You’ll want to keep doing it while away, but it’s risky carrying certain cameras with you. The perfect solution is to buy a quality action camera.

It won’t break no matter what you do to it, plus the quality will still be good enough. You’ll also be able to shoot different kinds of videos. They’ll attract a lot more visitors to your website and boost sales.

3. Get A Local Number

When you’re on the road you will speak to people on Skype. Don’t give potential clients your Skype ID because it’s completely unprofessional. You’ll need to give them a local number to keep up appearances.

Luckily, you’ll be able to buy one from Skype and nobody will know the difference. Just don’t tell them you’re sitting next to the beach. If you prefer another VoIP service get a land number from them instead.

4. An Email Autoresponder

Sometimes you don’t even need to work more than a couple of hours per day when you’re away. It will depend on the type of business you run, but it’s possible to take long breaks if you are lucky.

However, you will need to keep sending emails for a number of reasons. You don’t want your subscribers to forget about you. It will keep the money rolling in too. You can set everything up in advance with an email autoresponder.

5. Screen Recorder Software

We talked about the fact you would have your kids with you. Even if you are all alone you’ll want to outsource lots of work. Unfortunately, it’s difficult to trust anyone to do the job properly in your absence.

It’s the reason why entrepreneurs create standard operating procedures, but they’re not easy to follow on their own. If you have screen recorder software you can shoot videos going through everything someone needs to do.

It Won’t Feel Like You’re Working Hard

If you have this technology available you’ll have a great time while you’re away. Life will be a hundred times easier. It’s amazing to think a few tools can make such a big difference to your online business. http://bit.ly/2ouKSgh #SAP #SAPCloud #AI

Faster than Light, a short film by Adam Stern, captures a single idea as well as any good sci-fi short story. It’s also very pretty, and surprisingly moving. Well worth your 15 minutes. (Via Kottke)…

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