Category Archives: Information Technology Tools

The earlier you start on this, the better for your career

Procrastination exacts a heavy price. And there is one area of life in which delay is particularly costly.

Stephen Covey writes of “quadrant two” activities in his book, The Seven Habits of Highly Effective People. Quadrant two is the area devoted to those important things in life that we never really seem to get around to doing. They are important, but they are not urgent.

Planning and goal setting are good examples of quadrant two activities. What could be more important than defining a vision of success and knowing where you’re going in life? But most of us do not take the time to plan our career and write down goals.

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Simplify and Focus

My theme words for this season of life are simplify and focus. I even jotted these words on a note and hung it on my wall next to my computer at work. Every day in every way, I think: simplify and focus.

As Richard Koch demonstrates in his book about the 80/20 principle, complex is ugly, but simple is beautiful. Additionally, the Heath brothers show the value of simplicity in Made to Stick, which I’m re-listening to on drives to work.

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Four Tips for Career Blogging Success

Financial professionals can set themselves apart from the pack by having their own blogs or websites. Just as a successful business marketing strategy typically involves websites and social media, a successful personal branding and professional development strategy requires a website.

I have written several posts about the importance of writing. In addition to writing down agreements, goals, mission and vision statements, policies and procedures, roles, responsibilities, and expectations; systematically and routinely writing down personal reflections and lessons is invaluable.

In the future I will write about job interviewing tips, including using the STAR method for answering behavior based interview questions. For now, it is helpful to reflect on the type of characteristics that potential employers seek in candidates. Then use your professional blog as a platform to detail your understanding and attainment of the knowledge, skills, and abilities required for the job you desire.

Here are four types of posts to write on your professional career blog, as recommended by personal branding and career development expert Pete Kistler:

  • Growth – Kistler says, “Write a story about a class, a project or a job where your thinking shifted. Where you learned something that changed the way you think, behave, manage teammates or solve problems. Always portray the experience in a positive light. Then, concretely describe how you will apply what you learned to your next company.”
  • Expertise – Kistler recommends, “Relate the lessons you’ve learned to specific projects or experiences you’ve had, so employers will see that the expertise listed on your resume is grounded in reality. Then, describe how you will apply this knowledge to your next company.”
  • Knowledge of current events – Kistler recommends reading experts’ blogs within your industry. Summarize the knowledge you gain and how you can benefit your next company with it.
  • Ability to deliver – Kistler says, “The point is to give proof of your past performance. Provide the background story about each project and only upload your absolute best work.” Share Youtube videos, Powerpoint presentations, and other tangible evidence of your accomplishments.

Blogging will help you document what you are learning and experiencing. As you write you will ask questions, think through issues, and be sure you understand them as you write them down for others to read. You will then be better equipped to converse about the topics at work, in job interviews, during networking events, and so forth. In fact, blogging will provide a platform for networking, reaching people, and enhancing the expertise of others within your industry.

If you commit to blogging long-term, you will systematically force yourself to always learn and discipline yourself to constantly write. Much like having school assignments that you must complete whether you like it or not, having a blog gives you an opportunity to put pressure on yourself to grow and develop.

Use the four topics as a springboard to reflect on past experiences and lessons. Start summarizing your lessons learned and how you will apply them to your future job. It is not hard to set up your own blog to share this information and set yourself apart in your professional career.

17 Principles to Safeguard Assets and Ensure Organizational Effectiveness

One of my favorite aspects of being a financial professional is knowing that others on the management team and in my organization are relying on me. I am expected to handle key functions within the business, and if I do my job well I can contribute integrally to the organization’s success. This can provide a constant sense of urgency but also a rewarding feel of satisfaction and significance.

Among the not so glamorous yet important features of an organization’s structure are internal controls. Accountants are expected to implement sound measures to safeguard assets and reasonably ensure that management’s objectives are achieved toward effective operations, reliable financial reporting, and legal and regulatory compliance.

Even if this sounds boring, take consolation in the fact that your organization’s survival and success depends on it.

The Committee of Sponsoring Organizations (COSO) first released its Internal Control-Integrated Framework in 1992. This document defined internal control and provided accompanying standards. Over twenty years later the framework is still highly relevant.

In May of 2013 changes were made that kept the core intact and added, among other things, seventeen principles to help with implementation of the framework in light of changes over the years. A recent article in The CPA Journal discusses these seventeen principles as organized under the five categories of internal control within the COSO framework.

    • Control Environment

1) Commit to integrity and ethical values – this largely entails setting an effective “tone at the top.”

2) The independent Board of Directors should oversee internal control – among other things, objectively evaluate managers and ask appropriate questions.

3) Establish appropriate authority, responsibility, and reporting structures.

4) Attract, develop, and retain the right talent to achieve objectives.

5) Hold employees individually accountable for fulfilling organizational objectives.

    • Risk Assessment

6) Be able to identify and assess risks by having first formulated objectives with sufficient clarity.

7) Identify and analyze risks throughout the organization to determine how they should be managed – choose whether to accept, avoid, reduce, or share risks.

8) Consider potential fraud risks, including misappropriation of assets and alteration of records, that could deter the organization from achieving its objectives.

9) Be ready for changes, including within the external environment, business model, or leadership, that could impact the internal control system.

    • Control Activities

10) Mitigate risks to acceptable levels by choosing and implementing appropriate control activities.

11) Technology is a special category of importance for implementing control activities that help enable the organization to achieve management’s objectives.

12) Policies establish expectations and procedures put these policies into action in order to deploy control activities.

    • Information & Communication

13) Support internal control functions with relevant and timely information – capture data, transform it into information, and protect its availability and accessibility to appropriate parties.

14) Communicate internally regarding internal control objectives and responsibilities.

15) Communicate with appropriate external parties regarding internal control, carefully considering the timing, audience, and nature of the communication.

    • Monitoring Activities

16) Have ongoing evaluations to determine whether internal controls are working effectively.

17) Communicate internal control deficiencies to senior management and the board of directors so that they can timely take corrective action.

In short, internal controls help management set a proper tone, define organizational objectives, and run the business effectively. A leadership-oriented financial professional who wants to be indispensably valuable within an organization should study and understand how to effectively choose, implement, and monitor internal controls on an ongoing basis.

Poetry and Art for the CFO: Twelve Elements

Are you left or right brained? Analytical or emotional? A number cruncher or a poet?

Although it might run counter to our initial assumptions, CFOs are expected to go “beyond the numbers” and manage key aspects of the business as a whole. We have seen the importance of understanding technology and operations, among other factors not directly related to number crunching.

Very critical is the CFO’s role in dealing effectively with people and relationships. A CFO needs to be approachable. To become CFO material, a finance professional needs to develop habits of ambiguity tolerance, composure, empathy, energy, humility, and confidence.

On that note, the international accounting and finance firm Deloitte has published a poetic and artistic description of the CFO’s twelve elements, which encapsulates the expansive requirements and responsibilities of the CFO’s job:

“As CFOs grow in stature and importance, they keep coming back to the same issues that form their agenda. The elements of the CFO Agenda represent a powerful framework for one of the toughest jobs on earth. Year after year, quarter after quarter, they endure.”

Here are the twelve elements and my summation of the messages:

  • Truth – Be real. Know the true story and tell it.
  • Growth – Plant and water. Make choices and commitments to move plans forward.
  • Relationships – Work together. Manage relationships up and down, inside and out.
  • Decisions – Root your insights in numbers. Don’t manage solely based on your gut.
  • Capital – Manage business investments. Determine timing, amounts, and allocations.
  • Disruption – Be discerning as technologies, industries, and markets constantly change.
  • Crisis – Manage risks. Be ready to respond to various sorts of threats.
  • Infrastructure – Be an enabler. Invest in tech, talent, systems, and solutions.
  • Transactions – Research deals with the right criteria, calmly, thoroughly, and rationally.
  • Transitions – Change is constant. Build your skills and reputation in the midst of it.
  • The Street – Have give and take on forecasts. Be vigilant to represent the company well.
  • Me – Provide solutions. Navigate through complexity to make things happen.

Don’t take my word for it. Take a look at the presentation for yourself. Reflect on the messages. Do you agree or disagree with each of the elements and how they’re presented? How can you apply these insights in your work as you develop your career?

Know Your Enemy: Think Like Fraudsters to Beat Them

The famous ancient military leader and war theorist Sun Tzu is noted for his clear dictum:

“Know your enemy.”

Although the concept can make many people uncomfortable, finance professionals understand that combating devious financial schemes requires not only an understanding of system vulnerabilities. A battler against fraud has to learn how to think like a fraudster:

“If I wanted to steal from this company or misstate financial results, where would I look for weaknesses that would enable my scheme to succeed undetected.”

Of course, beyond concocting potential fraud schemes as a mental exercise, the careful and diligent finance professional is quick to pursue the ultimate aim of this process: Devise countermeasures to combat vulnerabilities.

The consulting firm WorldCompliance published a white paper entitled, Fraud and Money Laundering: Can You Think Like a Bad Guy? by Dennis M. Lormel.

Expanding upon the fraud triangle concept, Lormel lists five elements that characterize frauds:

A potential fraudster who 1) lacks integrity, 2) sees an opportunity due to a poor control structure, 3) has a motive such as greed or a pressure such as a financial hardship, 4) rationalizes the scheme (perhaps by reasoning that he feels underpaid and overworked), and 5) possesses the capability due to positioning and skills; will no doubt execute the fraud.

Certainly, as previously discussed, effective internal controls can mitigate the opportunity for fraud. However, sometimes it is possible for fraudsters to circumvent controls or to collude with partners in their schemes.

Lormel notes: “The elements of fraud include a representation about a material fact; which is false; and made intentionally, knowingly, or recklessly; which is believed; and acted upon by the victim; to the victim’s detriment. The ability to be deceptive and avoid detection is one of the fraudster’s primary keys to success.”

Bad guys are proactive about manipulating the system, even as those who combat them are often reactive. Among other factors, fraudsters look for environments with unethical culture due to poor tone at the top. Fraudsters understand the importance of laundering funds through financial institutions and maintaining a reasonable appearance and a story of legitimacy.

Lormel points out: “Over time, spin and deception get much more difficult to disguise. The veneer of reasonableness tends to fade. A good fraudster usually watches intently for signs that their scheme is unraveling. At that point, they will implement their exit strategy. However, often times, fraudsters are blinded by their own greed and arrogance. They either miss or disregard the warning signs of detection. Instead of following an exit strategy, they find themselves in jail.”

A finance professional, whether an auditor, controller, CFO, banker, investment manager, or someone else entrusted with fiduciary responsibility; has to think several steps ahead of the fraudsters. Know what warning signs to look for, ask questions, don’t believe everything you hear, and be ready to act quickly when something doesn’t look right.

Lormel concludes: “There are two prominent end games. One has a private sector focus, the other, a public sector focus. On the private sector side, the end game is to prevent or minimize monetary losses and reputational risk. On the public sector side, it is to seek prosecution, recover illicit proceeds and assets through forfeiture, and/or bring enforcement actions. Both end games could carry significant consequences. In either event, understanding how the bad guys think and taking preemptive steps to stop them makes the end game easier to handle.”

Know your enemy. Combat a fraudster by knowing how a fraudster thinks and operates. This is especially important with regard to IT-related frauds due to the importance and sensitive nature of electronic records and system access points.

Manage Risks with Preventive, Detective, and Corrective Controls

Is it better to sell a prevention or a cure? From a marketing standpoint, there is likely more money to be made selling cures. People would rather not attend to the many risks in their lives that may not materialize — after all, where does one begin? — but once a contingency does manifest itself, the same people are willing to pay great sums for cures.

The world of a finance professional is different. Some of our core functions include thinking, planning, and communicating about risk. We do not have the luxury of taking a “wait and see” approach toward managing risk. We have to be proactive about foreseeing risks and planning accordingly. We think in terms of broad categories, such as regulatory and legal compliance risks, IT-related risks, political risks, market risks, credit risks, and more.

Finance professionals measure the extent of our organizations’ exposure to risks and help guide senior management in assessing the best way to effectively expose our organizations to risk and at the same time manage risks. After all, if an organization is not taking risks, it might as well shut down because it cannot grow or produce a return on investment.

Part of an auditor’s evaluation of an organization is in terms of internal controls, how they are documented, how they are communicated, how employees are trained in them, and so forth. Controls are designed to prevent fraud and material misstatements of financial results, as well as to ensure effectiveness in carrying out management’s objectives.

Here are three types of controls to consider in your organization:

  1. Preventive — Some of the best controls prevent fraud, theft, misstatements, or ineffective organizational functioning. For example, we saw in a previous post the effectiveness of segregation of duties to prevent fraud. Preventive controls can be as simple as locks and access codes to sensitive areas of a building or passwords for confidential information.
  2. Detective — A security camera is a good example of a detective control. A store manager who notices a pattern of a cash drawer coming up short when attended by a particular clerk can easily look at video of the clerk’s actions throughout the day to detect potential theft. An access log and an alert system can quickly detect and notify management of attempts by employees or outsiders to access unauthorized information or parts of a building.
  3. Corrective — Coupled with preventive and detective controls, corrective controls help mitigate damage once a risk has materialized. An organization can document its policies and procedures, enforcing them by means of warnings and employee termination when appropriate. When managers wisely back up data they can restore a functioning system in the event of a crash. If a disaster strikes, business recovery can take place when an effective continuity and disaster management plan is in place and followed.

Think in terms of preventing, detecting, and correcting risks of fraud, theft, ineffectiveness, and breakdown. The world is full of risks, and problems tend to strike suddenly and unexpectedly. Cures are great, but if you rely on finding a solution once a risk has already materialized, you might find that your lack of planning has made the risk unmanageable.

Create a Company Dashboard

How can a finance professional provide timely and relevant information for business decision makers? In a previous post we looked at some steps for creating a company wiki for organization-wide knowledge sharing. Another routine and systematic tool for business information sharing is a dashboard. The CPA Journal recently ran an article about Developing Dashboards for Performance Management, and here are some highlights from the article:

  • Dashboards focus on goals. Managers have the responsibility to achieve business objectives, and they can make the best decisions when they have concise, periodic updates about defined organizational metrics.
  • Dashboards provide a quick visual glimpse into key performance metrics. The authors suggest having four to seven metrics on the dashboard to avoid information overload.
  • Dashboards can highlight financial as well as non-financial elements of business performance. The balanced scorecard approach, for example, assesses a company on the dimensions of financial, customer, internal processes, and learning and growth.
  • Dashboards should be user-oriented. Will the dashboard be used for reporting strategic, analytical, or operational information? This depends on the needs of the users. Also, the design and formatting should be tailored based on the type of user.
  • In choosing a dashboard technology platform, consider that ERP systems such as SAP and Oracle have built-in reporting and analysis modules. Alternatively, data can be drawn from databases into Excel to develop dashboards that can automatically refresh periodically. Excel dashboards can be developed from scratch, templates can be purchased, or skilled consultants can develop dashboards. 
  • The dashboard development process includes defining the objective and the metrics, seeking user input, building and testing the initial dashboard, publishing the dashboard, and monitoring its use.
  • Dashboard design elements can highlight important information, communicate information concisely, and engage users. The concept of “gestalt” can help balance various design elements to tie together the “big picture” with the details of the dashboard.

Dashboard development is a good skill for finance professionals to add to the professional toolkit. In addition to developing dashboards to share and analyze key performance indicators, a trusted go-to finance professional can provide decision support to help senior management use broad sources of information, including dashboard metrics, to steer the company in the right direction.

Lessons from a CFO: Operations, Technology, and Innovation

With the rise of technology and the rapid pace of change in the world, the role of the CFO is clearly being transformed. The traditional “sweet spots” for top finance executives are broadening beyond accounting and finance toward operations, technology, and innovation.

Lon Searle, CFO of YESCO which makes custom electric signs, provided some glimpses into his role in a recently published Forbes interview. Here is a summary of some of his points:

  • CFOs are becoming more focused on operations and supporting every department of the organization through financial analysis: “In manufacturing, the CFO has to get out on the shop floor and understand the operations and the product the company is making; he or she has to move the ball down the field in a way that provides value to the company.”
  • Understanding and working with information technology is an important part of the CFO’s role: “The CFO position is gaining a systems focus – it works with IT and financial analysis that can help every department.”
  • CFOs can serve as coaches for the finance staff as well as other functions in the organization: “I help train the financial staff, train the sales staff to lease to our customers, and even train our franchisees to help with financial decisions and funding decisions.”
  • Understanding international business is increasingly important for CFOs: “I also get involved in global shipping and interactions – getting letters of credit for our customers to ship products all over the world and deciding whether to hedge the currency risk in transactions. We’re a global company but not that large, so to be involved in that is surprising to me, given my career path. But it’s really a global economy now, and almost any CFO should be involved in those decisions and that research. It’s interesting and challenging, too.”
  • CFOs can help drive innovation in the organization: “CFOs can be a driving influence, spreading ideas throughout the company, helping employees cross-fertilize and see things from a different perspective. It’s a great position to be in. It’s unfortunate that some financial officers just see themselves as keepers of the books and not champions of innovation.”

Operations, technology, and innovation are broad categories for a financial professional to have on the radar, in addition to developing coaching skills and international acumen. The path toward the CFO role includes gaining professional knowledge and experience in these areas. These are helpful ideas to consider in mapping out a career development plan.

Create a Company Wiki

Knowledge sharing is crucial for organizational success in the Information Age. Knowledgeable, dedicated employees are often eager to add value and contribute to the organization’s success by sharing what they know. Finance professionals are fundamentally information workers who give and receive valuable insights to contribute to the success of the organization. There is not always a clear line of distinction between the finance and technology groups because tech tools are integral for the finance professional’s work.

Fortunately, in an environment that relies upon systematic information sharing, wisely deployed technology can facilitate the free flow of knowledge. CIO Magazine provided some best practices for implementing a company wiki:

  • Initially, what is a wiki? The article says it is “a software application that allows groups of users to create, edit and comment on online documents.” Wikipedia is undoubtedly the most popular example.
  • Companies use wikis for collaboration and employee communication, among other reasons.
  • The first implementation step is to define why the organization wants a wiki. This sets the direction and defines the parameters of the wiki’s purpose.
  • The second step is to choose a software platform. Options vary from free to fee-based, open-source, hosted, or deployed on the organization’s own system.
  • The third step is for the wiki implementation team to define the structure: “These include defining to what extent end users will be able to edit wiki pages, setting standards for how administrators will respond to updates from users, and setting rules around uploading text files or videos.”
  • The fourth step is to put someone in charge for maintenance. A wiki “gardener” can help the project grow, root out “weeds” (i.e., old information), and bring contributors on board.
  • The final step is to promote the wiki to end users. Start uploading useful content, refer to the wiki in communications, and encourage employees to read it and contribute what they know.

One helpful website referenced in the article for comparing wiki options for different purposes is

Bottom line, wiki implementation and maintenance is a good tool for finance professionals to consider adding to their skill sets.