Could M&A Activity be a Springboard for Controllership Transformation?

New York, January 10, 2023 /PRNewswire/ — More than two-thirds of M&A professionals believe their organizations’ deal operations are in pursuit of some form of financial transformation, including digital transformation, process simplification and automation, according to a new Deloitte poll. They said they were connected (68.4%). Most respondents said that such M&A-inspired transformation would occur post-deal (33.6%), while others said it would occur during (21.9%) or pre-deal (12.9%). starting it.

As a result of M&A activity, respondents said their organization’s control teams are now leveraging advanced technologies such as analytics (21.2%), enterprise resource planning modernization (21.1%), and workflow management (15.6%). I’m here.

“For many controllers, CFOs, and their teams, transactions provide a much-needed business case to initiate transformational efforts around controllership. Maria Bunch, Deloitte Risk & Financial Advisory Principal in Execution, Accounting, Reporting, and Integration, Deloitte & Touche LLP. “Fragmented controllership processes and disparate systems are common among merged companies, with controllers and financial leaders performing financial due diligence, transaction accounting, regulatory reporting, post-transaction auditor reviews, and new business transactions. As a result, trading is often limited to streamlining controllership systems and managing transactions, financial results, and reporting within new company structures. The investment will be focused on increasing the flexibility and agility we need.”

Respondents said the biggest challenges for finance or accounting teams supporting M&A activity over the next year will be the continuation of manual, outdated, or redundant business processes (28.4%) and the lack of adequately skilled personnel. We expect a shortage (26.2%) to follow. Presence of different or outdated financial and accounting technology (25%).

“Increasingly, management teams are looking to determine when and how to pursue controllership transformation initiatives alongside transactional activities. jenny gilmore, Deloitte Risk Financial Advisory Managing Director of Management Accounting and Reporting Services at Deloitte & Touche LLP. “Most respondents expect their organizations to pursue M&A activity in the next year, so many organizations are looking to modernize their workflows and ERP systems, adopt analytics, and do other things to execute carve-out financials. It will likely also focus on transforming controllership, such as exploring special-purpose technology: statement or purchase accounting.”

Leaders can ask questions during transactions that help determine the need for controllership transformation:

  • What processes, systems and roles are required for “day one” post-trade operations? What about the first close?
  • How does the controllership function support your business in achieving your overall trading strategy? Are you currently positioned to do so successfully?
  • Can a common information model (chart of accounts) efficiently accommodate internal and external reporting before and after transactions?
  • In the case of a merger or acquisition, are there synergies (such as process efficiencies or technology) in the controller functions of both companies that would be beneficial to achieve prior to closing the transaction?
  • Will this transaction add administrative complexity that requires managing new technologies and systems (e.g., more tax jurisdictions and legal entities, multiple charts of accounts, new supply chains)?
  • Is this transaction part of a chain of transactions that may trigger additional or more urgent conversion needs?

About online voting

Over 1,700 professionals involved in organizational M&A were surveyed in a recent Deloitte Center for Controllership webcast titled “How Mergers and Acquisitions Drive Controllership Transformation.” October 13, 2022Response rates vary by question.

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