Finance flash: the TOP-10 articles of week 40, 2018

Want to keep up to date with the latest developments in finance, but you are short of time? Don't worry. CFO South Africa weekly collects 10 of the most important articles from international media for your convenience.

1. Don’t Just Tell Employees Organizational Changes Are Coming — Explain Why
Employees around the world are reporting that big organizational changes are affecting their jobs. From leadership transitions and restructurings, to mergers and acquisitions, to regulatory changes, there seems to be constant unrest in the workforce. But according to one survey of more than half a million U.S. employees, almost one-third don’t understand why these changes are happening. This can be detrimental for any company trying to implement change.
 
2. Do not blame accounting rules for the financial crisis
Some critics of International Financial Reporting Standards argue that they gave an overly rosy picture of banks’ balance sheets before the crisis and are still not prudent enough despite improvements since then. These same critics also argue that excessive reliance on fair value accounting, which reflects an asset’s current market value, has encouraged untimely recognition of unrealised profits.

3. Stanford Professor: Successful Leaders Do These 3 Things to Build High-Performing Teams
Whether you're a coder or marketer at a five-person startup or one of tens of thousands of employees at a sprawling multinational company, the one thing you can be certain of is that you'll be working in one or more teams. Teams are the most fundamental unit around which every company is organized. When teams work well, companies design, produce, and ship great products and services. And the most successful leaders in any organization tend to be the ones who can build and motivate teams to achieve common goals.

4. Demystifying AI and machine learning for executives
In this episode of our Inside the Strategy Room podcast, senior partner Tamim Saleh cuts through the hype around artificial intelligence (AI) and offers clear guidance for executives looking to make precise strategic decisions about where and how to employ AI in their businesses. Tamim shares insights on the impact of machine vision on AI, the future of voice recognition, and the latest developments in advanced analytics, virtual assistants, and robotics. He outlines the challenges companies face when adopting AI and the steps CEOs can take to overcome them.

5. Highest Priority for Finance Today: FP&A
Financial planning and analysis has emerged in recent years as a cornerstone of an effective finance function. Still, whatever advancements in FP&A quality have been achieved, they’re apparently not enough to satisfy CFOs. Among 10 key finance processes and activities, finance officials surveyed by Protiviti identified FP&A as the highest priority for improving knowledge and capabilities over the next year.

6. Why Agile May Be Fragile
Every few years or so, the management consulting community latches onto a new cure for everything that ails large (i.e. potential customer) organisations. The hype cycle unfolds in predictable phases: the new practice seems to work in a number of organisations and gets highly publicised, companies of all sizes and kinds are encouraged to adopt it, a few prominent failures occur, and infatuation gives way to disillusionment as the magic medicine doesn’t seem so magic anymore. The cycle unfolds again (and again) as the fallen wonder gets replaced by the “next big thing”. In the process, a perfectly sensible practice that could work well for some organisations to solve some problems may become unfashionable enough to be rejected by most organisations. The baby is gone with the bathwater.

7. 7 ways companies misuse their accounting systems
Some businesses purchase highly respected accounting systems but then fail to implement or operate them properly. This often results in employee frustration, management disappointment, and a poor return on investment. To help your company avoid these setbacks, this article describes seven common accounting system implementation and operational mistakes and provides suggestions for how companies can save themselves from committing them.

8. The Growing Menace of Non-GAAP Measures
How do you transform a loss of US$420 million into a profit of US$60 million? Easily enough. You do like Groupon did in 2011 before its highly anticipated IPO. Simply take your 2010 income statement loss and exclude your marketing expenses, stock-based compensation and acquisition-related costs. Voilà! Your new “adjusted consolidated segment operating income” looks good. Firms have become increasingly brazen in their use of alternative metrics which cast their financials in a favourable light.

9. How to get the most out of eInvoicing
It’s no secret that invoice processing is one of the least favourite tasks for any business. It’ll therefore come as no surprise that removing time-consuming, manual data entry from invoice processing was identified as a priority for procurement professionals. Despite finding that this was, in fact, the number one concern for the 200 procurement professionals we surveyed we also found that the eInvoicing module (software designed to reduce admin-heavy processes for handling invoices) was revealed to have the lowest adoption rate of the entire eProcurement suite. Only 53% of our survey respondents were currently using eInvoicing to aid financial processes as part of an eProcurement suite.

10. How to know when your intuition is bad
Listening to your gut can often be a source of good information. The information we receive comes from the subconscious, and when patterns make sense we make connections that can come as an insight, says Jonah Sachs, author of Unsafe Thinking: How To Be Nimble and Bold When You Need It the Most.