Auditing. It’s essential but not that exciting. Until, of course, you find a “black hole” - an unexplained lack of money where there should be some. Then it gets the wrong kind of interesting.
There’s no better example of this than UK café chain Patisserie Valerie’s plunge into a £40m black hole in its accounts. It’s a problem discovered after the end of the financial year, but could have been easily avoided with more frequent oversight.
Thankfully, as with anything involving technology, auditing methods are improving, readily freeing up mental capital to deal with the more exciting side of the business. The solution? Continuous auditing.
Drowning in data, and a mountain of reports at the end of a financial quarter? The continuous auditing process uses software and hardware to identify the top issues, prioritising risk and giving real time feedback. An overload of data makes it difficult to see the important topics, so curating inputs is important in providing coherent insights and cutting through to the essential data.
Today’s 24/7, digitally-powered economy moves too fast for manual number crunching. Much like rapidly accelerated Dev Ops deployment, shorter and more frequent cycles are being implemented. Continuous feedback, testing and problem identification as soon as possible will become an imperative as automation becomes the norm.
The results are provided in real time (as opposed to a monthly, quarterly report) so the feedback is never outdated and large amounts of data can be processed in short amounts of time. Smaller cycles lead to corrective action - much easier to deal with in a shorter time frame.
Improved performance and efficiency, the dream of any company. Using constant, up-to-date monitoring and real time feedback can shave off costs, time and provide clarity to better see where resources need investing.
Automated processes put you back in the driver’s seat, able to see exactly how and where money is being used and removing the possibility of financial black hole that’s unaccounted for.
With the ability to automate, comes the need for it to be applied to different processes. We’ve seen how it can be applied to software in Dev Ops, now Finance. We are applying the same mindset in Breakthrough Strategy. Continuous building, measuring and learning enables you to constantly update your strategy in small iterative cycles rather than one over-arching, 20th century-style grand strategy which doesn't account for disruption.
So Now What?
Agree parameters - You have more data than you can shake a stick at. Set parameters for clarity and transparency, look only at what is important.
Use automation - Across the board, tech is making our lives easier. Machine learning can work it’s way through countless documents far quicker than any human as well as make fewer mistakes. Do little, often and automate.
Work in smaller cycles- Don’t let a black hole pop up and swallow you. Feedback in real time means a quick and frequent check up on the details makes spotting a problem easy,
All of these apply to any discipline in the digital age - whether it’s dev ops, accounting or your approach to strategy.
Continuous audit means that fewer companies will open up a black hole at the end of their financial year. If your strategy’s outdated and unworkable, then why wait until the end of the year to find out?
Copy writer- James Oliver Craigmillar