When the credit markets suddenly froze during the financial crisis, finance teams at large companies went into triage mode and raised spare-cash levels to unprecedented heights. What’s happened since then?

One year ago, APQC’s financial management research team began to examine the current and future state of working capital management. Our working hypothesis, which carried across several surveys and published reports, held that the Great Recession was so big and hairy that it would compel CFOs and COOs to pursue sustainable improvements to the management of working capital and cash flow intelligence. The important word in that last sentence is sustainable.

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CFOs and treasurers are unhappy with an SEC proposed rule change that would require “quantitative and qualitative” disclosures about short-term borrowings in the Management’s Discussion and Analysis (MD&A) section of periodic financial statements. And that’s just for starters.

Everyone knows that the SEC is trying to close the door on the types of big bank shenanigans that sparked the financial crisis of 2008-09. Who can forget Lehman’s Repo 105 parlor games? But the effort is spilling over onto nonfinancial corporations in, perhaps, unintended ways. According to Michael Gallanis, who runs the corporate consulting practice at Treasury Strategies, Inc., “This is part of the financial fallout of the past 24 months. The SEC wants added transparency over how corporations manage their liquidity and their short-term borrowing practices.” On its face, that’s a noble intent: Give investors the information they need to evaluate how well a company is being managed. “But some treasurers think this SEC proposal is overkill. They worry that the SEC will impose a ‘one-size-fits-all’ disclosure requirement. And that could have the opposite effect of what is intended and needed.”

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At this time each year, teams of corporate accountants work fervently to close the books on last year’s financial results. APQC’s benchmarking metrics show that some teams struggle mightily under the weight of this challenge, while others seem to move deftly through the steps.

What follows is a view of performance gaps (cost-efficiency and productivity) that pertain to the financial management process defined as General Accounting. You will immediately see wide disparities. The data comes from a grouping of 217 organizations that have measured their performance relative to peers using APQC’s Open Standards Benchmarking database.

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The never-ending pursuit of cost reduction in financial management operations is all well and good — but do not overlook the negative impacts of slow process cycle times.

APQC research conducted during the fourth quarter of 2010 points to renewed enthusiasm among CFOs and controllers for investing in financial process improvement, with another round of cost elimination being the primary goal. Particularly in the area of accounts payable, we see large organizations taking steps to reduce the total process cost by eliminating headcount. Along these lines, there has been a lot of interest in document imaging and management technology that aims to reduce the mountains of paper invoices that gum up payables processing. That, in turn, allows organizations to consolidate many of the positions previously needed to manually process all that paper. more

A new talent crisis is about to hit corporate finance. The word “new” is deliberate. This time, the challenge is not about the rising cost of good people. It’s about what good people do.

About 5 years ago, CFOs and controllers were complaining about the rising cost of accounting talent. In the wake of Sarbanes-Oxley, the proverbial work/life balance became unbearable, and the work itself grew highly technical, in the classic sense of applying accounting rules and controls testing. People who yearned for the excitement of swashbuckling M&A deals exited quickly. In just about every major American metropolitan center, the market for experienced corporate accountants tightened. Turnover soared, as did the salary requirements of finance folks on the move.

That was then. What I have been hearing lately as part of my research at APQC is that senior finance executives are deeply concerned about a dearth of people in the market who possess the so-called “soft skills.” Those include critical thinking, problem-solving, negotiation, communication, and collaboration. Apparently, finance professionals with soft skills in abundance can name their price. more