Ep. 99: Andrea Williams - The Future of Accounting Work

Contact Andrea Williams: https://www.linkedin.com/in/andrea-williams-201a9a12/

FULL EPISODE TRANSCRIPT:
Mitch: (00:05)
Welcome back to Count Me In. IMA's podcast about all things affecting the accounting and finance world. I'm your host Mitch Roshong, and this is episode 99 of our series. Today's conversation features Andrea Williams, Senior Vice President and Controller at Perdue Foods. In this episode, Andrea talks with Adam about the future of accounting work and the ethical challenges management accountants need to be aware of as their roles continue to evolve. Let's get over to the discussion and hear more about the topic now.

Adam: (00:40)
What do you see as the differences between management reporting and financial reporting?

Andrea: (00:45)
Well, financial reporting certainly has to follow all of the accounting roles that we were trained on as accounting professionals and those roles continue to evolve over time. Management reporting should certainly follow all those rules, but normally management reporting looks at slices of the business and targets insights into subsets of the financial statement. And so it's really important for the management accounting teams that are preparing that information to keep the financial reporting in mind and certainly tied to it and every possible way that they can, but to recognize that they're peeling the onion and that they really need to be careful in how they represent those pieces, that they would still represent what is in the ultimate financial statements. In our business, we have, we use management reporting for certainly for what I would call, accountability reporting. We provide levels of reporting for all layers of management, from folks that are running a subset of the production floor all the way up, of course, to the executive. And we also provide reporting that is targeted to certain functional areas, you know, the sales teams and the marketing teams and the, the critical aspect of this is that as management accountants, again, we need to really be sure that ultimately these are subsets of the financial reporting and be really careful that we don't mislead folks as we're just providing their slice of the pie.

Adam

So how do those differences, provide some additional ethical challenges that management accountants need to be aware of?

Andrea:

Well, providing the multiple views, doesn't always easily coalesce, into the total. And so an example of that is, we actually provide, what we call sales value of production to each of our plant facilities. Sometimes they like to call them income statements. We always correct them and say, no, this isn't an income statement. This is a sales value of production. And the critical difference there is that from a production perspective, they're interested in understanding a margin related to products they produce that week or that month or that quarter, even. And of course we are as many businesses, we don't sell out everything that we produce in a particular alignment with a financial week or financial close, and so consequently, we are put in a position of bringing in what we call a representative sales value. It may end up being more or less than what we ultimately realized as the invoice value. And so where this becomes an ethical challenge is that, of course we have algorithms that go out and choose what sales value to use, for example, that's based on history. And so everyone's happy to use that sales value when it, when we're in a rising market, unless happy to use it when we're in a declining market or in a business that is impacted by some commodity values. And, that becomes, can become an ethical challenge because obviously you can't play both sides of the coin and because it isn't, tied to invoice sale, we get into very interesting conversations with our production folks, and we all just need to remember what was the point of what we're trying to represent and be as honest as we can with the business and ourselves and what we're representing.

Adam: (04:35)
Definitely. So, you know, you're kind of referring to how, you know, things are constantly changing in the industry and all over the world, and obviously we're still in a pandemic that's happening. how have you seen like the management accountant role evolve over time, especially with all the, everything that's been happening?

Andrea: (04:52)
Well, in the most recent day, I would say the, just like everyone else, we all have to learn how to work from our homes, where we were traditionally more used to being in the offices or in the plant, the plant, buildings. So certainly our technology skills have had to improve and our collaborative skills, you know, building itand, you know, as everyone in the world that seems to be doing as our zoom meetings. So that's in the more recent, the more recent days of how we've had to evolve. I would say over time in my career, there's really been an evolution of what the management accountants are expected to do. When I started, the roles were very, closing focused. The closing calendar was paramount. We, you know, work through task lists that were either leading to, or coming out of closing cycles, and it was still very much, an accounting role. And although we still have those responsibilities, our business partners really, don't expect to live and die by a resource that is connected to closing calendars, and consequently we've had to smooth out our tasks, and actually provide information in a more consistent basis every single week. And then some, some cases every single day. That is not really impacted, by the strict financial reporting. And what that means is then we've added to our plate, a significant amount of what we call estimates. We do a weekly estimate, all throughout the entire business of what we based on information that, you know, certainly happened in that prior week. But, you know, we're making, you know, educated guesses of what something will actually realize based on education and history and foresight and those types of activitieswe're not anywhere in the role when we, when I first started. And so then that's transitioned to not just, you know, that's still looking backwards, and so in the last several years, of course, then now we're being asked to look forward and providing, much more of our time is providing information of what we believe will happen, not reporting on what has happened. That's a significant shift and it requires, um, very demanding skills on, on accounting folks, very different than, you know, the traditional auditing skills or traditional just financial closing skills.

Adam: (07:39)
For sure. So you, you know, you've described kind of how the roles evolved for that you've seen over time, but where do you kind of see it going in the future?

Andrea: (07:47)
So, interestingly enough, I feel like the profession's at a crossroads. A crossroads being that, are we going to continue as management accountants covering both roles? Are we going to continue to be the ones that, you know, shepherd the books and really make sure that things are tied out, in addition to all the analytical demands, or are we going to split into separate groups? That one group is handling the accounting and one group is deeper into the analytics. I've seen that certainly some of the other bigger companies as they, as they create separate FP&Agroups. and I feel like I'm seeing a trend of that, that's more and more what's requested, certainly at the, at the bigger, at the bigger companies. And so what happens there is that then how do those teams ...