CAO in the New Reality, Part 1
A continued discussion of the CAO’s evolving role
The traditional role of the Chief Accounting Officer (“CAO”) is evolving beyond governance and compliance to incorporate transformation and business partnering (see KPMG report, “CAO rising: How the chief accounting officer role is evolving”). A major aspect of this evolution involves the modernization of the finance workforce through automation and digitization.
To address the topic with frontline practitioners, KPMG LLP recently conducted the first of a two-part webcast on “CAO in the New Reality.” Part 1 of the webcast featured guest speakers Renee Jewell, Airbnb’s Platform Controller, and Stephen Hope, CAO of Autodesk, and was moderated by Dean Bell, Transaction Services Service Line Leader at KPMG.
The accounting function is the bridge across an organization with strong data lineage and traceability that allows critical, real-time decision making. Insights from our panelists revealed that a foundational component in achieving this is moving away from legacy infrastructure and processes by modernizing ERP systems and deploying other master data management platforms to eliminate data silos across business functions.
Eliminating data silos
At Autodesk, a group that directly reports to the CAO was set up to help address these legacy issues, Hope said. This team focuses on processes and systems in the back office to support new business models, M&A integration, new accounting standards and ongoing improvements. They bring a combination of technical accounting, project management and systems knowledge to execute the business requirements. They are supported by their peers in the revenue accounting team, which focuses on contract and ASC 606 compliance within their revenue system. Together, a better understanding of the business is achieved and knowledge across functions is shared.
For its part, Airbnb set out to transform its platform data through automation, a project that took approximately a year from kick-off to go-live, and involved cross functional teams from across the company to architect and design the data pipelines and real time data validations. The company has automated real-time data validation and daily posting to the ERP, with only exceptions requiring manual review and correction, Jewell said. The goal of the project was traceable, real time, accurate platform financial information - the outcome achieved all of those goals in addition to reducing the Platform Close timeline from 5 to 3 days, while adding significant increased daily visibility of financial information across Finance. Additionally, Airbnb performs monthly and quarterly supplemental analysis which is also in the process of being automated.
Digitizing the finance function
Benefits of digitizing the finance function include accelerating the close window and providing more meaningful data on a real-time basis. A successful digitization program requires alignment from the data stakeholders and consistent and reliable access to the data from a single source of truth in order to make strategic business decisions.
For external reporting activities, Stephen Hope from Autodesk expects to implement more measures to automatically populate numbers into draft filings and reflect changes in real-time, thus, saving business resources from hours of manual work. Renee Jewell from Airbnb expressed that while the company does leverage some automation for external reporting, they continue exploring options for ways to auto-populate data into footnote disclosures.
As for reconciliation software, Autodesk implemented the Blackline reconciliation capability years ago and has performed a risk ranking of the reconciliations. Autodesk assesses its chart of accounts annually and determines the reconciliation process and necessary reviews. At the same time, Autodesk has an independent audit of its reconciliations performed once a year; the feedback and training help improve their reconciliation process. Similarly, Airbnb leverages several reconciliation tools and performs risk ranking of reconciliations specific to frequency of completion and timing of the review.
In order to modernize the finance function, the workforce of the future must also be taken into consideration. Both of our panelists agreed that organizations need to prioritize continuous learning to evolve as business partners and adapt to this new reality. It is clear that the current virtual working environment has created a cultural shift, and cultivating a culture within the finance function that looks for automation solutions and pushes forward digitization will be incredibly valuable for continually elevating the CAO’s office as a trusted business partner.
To learn more about the evolving role of the CAO, access our on-demand webcast.