FinanceTechNews.com » 3 big reasons IT and Finance can’t get along

3 big reasons IT and Finance can’t get along

September 29, 2008 by Valerie Helmbreck
Posted in: Budgets and spending, Communication, Compliance, Software, Software shortcuts, Special Report, Uncategorized

OK, so IT gripes about every department. But there are some finance-specific behaviors that really seem to get their goat.

With the amount finance departments depend on technology, it couldn’t hurt to improve the relationship — and the communications — between these two important departments.

Our friends at CFO Daily News found a techie “Deepthroat” who was willing to ID the three things that irk tech folks most. Here’s what makes the list. Do you agree?

Annoyance No. 1: Spreadsheets

Spreadsheets aren’t the perfect solution, but they’re the lifeblood of most Finance departments. But what happens when a given process outgrows Excel (and many do)?

That’s where the trouble comes in for IT. At some point, finance may want IT to resolve the problem by creating new software. But IT often doesn’t understand the “business of finance,” and chances are finance isn’t well versed in modeling a business process in software.

The best compromise: For any future projects — even “wish list” ones — be sure IT is involved early so they can suggest ways to set things up.

With projects already in the works, finance needs to be prepared to offer a lot of background and explanation about what goes into that particular process they want automated. It couldn’t hurt to document what goes into creating those spreadsheets too (a good control for Finance anyway).

Annoyance No. 2: Reorganization

“Moving accounts around in the ledger,” “Having a certain department’s expenses capitalized” — all noble plans. And probably some of which have been tried before. But the more automated Finance is, the more critical it is they alert IT when changes are made. It can open up a rather messy can of worms otherwise.

Your best compromise: If finance wants that flexibility (and they most likely do), it needs to be built in from the start. That’s an important agenda topic when you begin discussions about new software, programs, etc.

Annoyance No. 3: Accounting rules

Think of the fits that ever-changing accounting rules and regulations give finance and its staff.

They also do a number on IT, who pride themselves on being able to explain the basics of a ledger and double-entry accounting. When it comes to SOX, GAAP, FASB and IASB, they barely have a clue.

Those rules really do affect the way software has to be designed. If you’re initially asked for a simple chart of accounts, but during the testing phase it turns out that the accounting rules require your company to amortize monthly P&L changes, the entire system may be a write off.

Your best compromise: IT needs to ask about features that would be nearly impossible to add in down the road. If the software hasn’t captured time-series data, for example, that’s the kind of thing that’s very tough to add in later.

It’s a good idea if both Finance and IT know about these potential pitfalls in their relationship from the outset. Then, they can structure a relationship that works around these problems – without the blame and finger-pointing that can make for bad blood and lousy productivity.

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