Bottom Line Still Top Management’s Focus

The article “Accounting—The Digital Way” ( JofA, May99, page 99) cited the need for executive commitment as a cultural element essential to putting enhanced financial reporting systems into place. I agree, but the ability to clearly demonstrate to executive management the bottom-line benefit of a new system’s expected efficiency gain seems to be the critical factor to get that commitment. Even if a CEO does not use a PC, executive management’s decisions ultimately will be based on selecting the investments that are most likely to achieve the entity’s business objectives. Can Microsoft, or other companies that have implemented similar financial reporting improvements, provide additional information that describes the actual or projected savings from implementing systems changes? For example

• How many fewer people will be required to close the books?
• How much money will be saved by filing an expense account online?
• How and when will the savings be translated to bottom-line earnings enhancements?
• What was the return on investment and the expected bottom-line cost savings of the changes?

Data of this nature are essential when proposing systems changes to executives.

Charles C. Lipscomb, CPA
Houston