Like many of you I have been following with interest and astonishment the U.S. government’s efforts to manage the current financial crisis. $700 billion to help US banks rid themselves of bad debt after years of too much leveraging and bad loan practices. Fannie Mae/Freddie Mac awash with rotten assets with congressional oversight asleep at the wheel. Additional bailouts, for Citigroup announced just last week. On October 6th the US Federal Reserve announces plans to buy massive amounts of short-term debt from companies in an effort to unfreeze the money markets. On November 25th the Federal Reserve says it is to inject another $800 billion into the US economy in a further effort to stabilize the financial system. About $600 billion will be used to buy up mortgage-backed securities while $200 billion is being targeted at unfreezing the consumer credit market. Today, U.S. automakers drew fresh skepticism from lawmakers in a rocky confrontation over their pleas for an expanded $34 billion rescue package they say they need to survive.
Whatever happened to management following best practices in good times and in bad? What has become of business risk management, internal controls, planning and budgeting, working capital and free cash flow management, aligning incentive and compensation systems with goal achievement, strategic cost management, quality management, and improvement principles such as Six Sigma? While I am, of course, oversimplifying, and fully realize that it is never possible to avert the next economic or financial crisis, surely, best practices in these important disciplines were not adequately followed.
Highly competent and skilled management accountants, are vitally necessary now more then ever to help organizations create growth, manage risk, manage and predict cash flows, design and implement quality improvement systems, design and implement strategic cost management systems such as activity-based costing, implement internal controls, and much more. They should be trusted business advisors to CEOs, in good times and in bad and management needs to wake up a leverage their skills.
You and your employees could be the biggest security threat to your organization’s data. Confirming earlier research, a recent study by Ponemon Institute, sponsored by IronKey, has identified that the main threat to your company’s security isn’t viruses or attacks against your server, storage and network but is instead, your own employees.
While not malicious in their intent, many employees are opting to do their jobs the easiest and fastest way possible, even when that means cutting corners and disregarding policy. From downloading data onto unsecured mobile devices, sharing passwords, to using web-based personal email and social networking sites in the office – employees are putting companies at risk.
Specific percentages of the ways data integrity is being compromised are as follows:
• 61% download data onto unsecured mobile devices
• 47% share passwords
• 43% loose data-bearing devices
• 21% turn off their mobile devices and/or security tools
• 52% use Web-based personal email in the office
• 53% download Internet software onto the organizations devices
• 31% engage in online social networking while in the workplace
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For the second consecutive quarter, the percentage of CFO’s who anticipate hiring more Accounting and Finance workers has gone up. While those who plan to hire more employees in the 2nd quarter of 2010 stands at just 7%, it is still a sign of good news because it is the highest forecast since the 1st quarter of 2009. In addition, the number of those expected to decrease staff has gone down the past two quarters.
A survey of 1400 CFO’s in the United States found that 84% are ‘somewhat confident’, and 34% are ‘very confident’ of the near future. The survey, conducted by Robert Half International also noted that the Mountain states are expected to hire the most new workers, many of which are in the education and health services sectors. Robert Half International chairman and CEO, Max Messmer said, “While most businesses remain cautious, some companies are beginning to hire selectively to ensure they have the employees in place to capitalize on opportunities that may arise as a result of an improving economy. In some cases, firms are using temporary professionals to help meet workload demands and as a way to evaluate individuals for potential full-time positions.”
Ultimately, this may be a good sign of things to come in our economy. To read more about this, click here.
According to a recent survey performed by Unit4 Coda, Accountants are under added unnecessary stress. The survey found that accountants feel they are being held to unrealistic deadlines and have an over-reliance on spreadsheets due to inefficient accounting systems. Further, among the top contributors to unnecessary stress is an apparent disconnect between executive management teams and accountants.
A report of the survey’s findings on unit4coda.com states, “Over 66 percent of the survey’s respondents(1) said an average close period takes over five days to complete, but the survey also revealed that more than 55 percent of accountants are expected to complete a close in a maximum of five days.”
Other items noted were:
- 70 percent of respondents reported that inadequate reporting from their financial systems was a source of stress.
- 58 percent spent more than four hours reconciling subsystems to the GL with 25 percent taking two days or more.
- 53 percent of accountants reported clocking overtime hours during a period close.
It appears as though many companies are still struggling with antiquated processes and software which is adding unnecessary pressure on accountants and employees as well as increasing the likelihood for error. If this situation sounds familiar, it is definitely time to take a look at how a better system and automation process can improve the overall operations of your organization.