When the Berlin Wall came down, many joked that the reunited Germany would begin producing coal burning BMWs.
Blending old systems with new often creates a weakest link; that of the old system.
When reading through the fraud case at Koss or the problems with the Pentagon’s payroll, both articles mention how outdated their accounting systems were/are.
“Precise totals on the extent and cost of these mistakes are impossible to come by, and for the very reason the errors plague the military in the first place: the Defense Department's jury-rigged network of mostly incompatible computer systems for payroll and accounting, many of them decades old, long obsolete, and unable to communicate with each other.”
The shiny new robots the COO uses to manufacture top quality products can be quickly overshadowed by the lagging systems the CFO is using to measure and predict costs, cash and position. And, the entire operation can quickly be overshadowed by fraud taking place in account reconciliations that are completed in silos without controls via a manual system.
Granted, SOX compliance does not strictly say that companies must obtain the latest and greatest in accounting automation solutions. However, in order to meet the time and detail demands of regulation, the company that is united via updated systems that talk to one another and automate manual processes, is the company that is positioned to focus on strategy and success.
Account reconciliations may be thought of as inconsequential to the C-Suite. This post explains why this couldn't be further from the truth as account reconciliations have brought down many a good CFO, CEO and CIO. Read more >>>