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Welcome back to Count Me In,

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IMA's podcast about all things affecting
the accounting and finance world.

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I'm your host, Adam Larson. And
this is episode 143 of our series.

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Today's conversation
features Michael Schmit,

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the corporate controller and
chief accounting officer of SWM.

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The accounting team at SWM has been
going through a business transformation,

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including the implementation of RPA,

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improved operational analytics and
several process improvements to meet the

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needs of the growing business. And Michael
has been the leader of these efforts.

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In this episode,

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he discusses the importance of identifying
the company's why when considering a

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transformation and the role
of technology in the process,

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keep listening as we head
over to hear more now.

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So business transformation is not really
new when it comes to accounting and

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finance, but the systems, the processes,

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the things that are being
transformed have certainly evolved.

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So what has accounting transformation
looked like at SWM and how does that

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compare to previous
transformation projects or
other things you've seen evolve

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in your experiences?

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Yeah, I think that accounting
and finance really isn't new,

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but I think the why we're doing this
and the, how we'll achieve this,

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really has been continuing to evolve,

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to ensure that we're meeting customer's
needs. For instance, the SWM,

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our accounting business transformation
is really following our overall company's

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business transformation. SWM's

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has been growing at an accelerated pace,

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both organically and through acquisition
in the last year and a half or the

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last, I guess two and a half
years since I've been here,

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we've actually grown from about a
billion in revenue and 22 production

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facilities in eight countries to now 1.5
billion in revenue with 36 production

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facilities in 11 countries. And now
we operate in over 90 countries.

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So we've been really focused on
integrating our acquisitions while

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transforming our own accounting processes,

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leveraging best practices from companies
we've acquired as well as adding new

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technologies along the way.

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So our why wasn't to,
just, you know, cut costs.

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It was to obtain synergies
from the business,

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but also improve on kind
of our status quo and,

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add more value from our
roles as accountants.

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The vision for the accounting organization
here is to operate as one team and

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one company to support
our company's vision,

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their knowledge sharing and
process improvements and
leveraging technologies to

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execute world-class business
partnering and fiduciary excellence.

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And so all those things are kind
of leading the transformation and,

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you know,

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we see the fiduciary excellence piece
as the absolute minimum expectation.

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Yeah. That includes complying
with all laws and regulations,

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and to do that as efficiently as possible,

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but then also business partnering,

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which is partnering with companies'
leadership and management,

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each other on our teams,

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and also other groups
to provide actionable,

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insightful reporting to assist in
decision-making to achieve the company's

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vision. So in other words,

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taking the rear view kind of near
view of driving down the road

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and focus more on what's coming on the
windshield and in the future of the road

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ahead. So this is different
than past transformations,

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I was involved with in other companies,

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cause I think the why was really always
focused on how do we lower costs and

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the,

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how was we're going to offshore it to
a lower cost place like the Philippines

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or India. You know, sometimes
robotics were in there as well,

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but really that's the
main difference I see.

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We'll get back to the specific, why at
SWM and some of the goals and, you know,

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progress that you've seen in
just a minute, we'll go to that.

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But I first want to, you
know, take a step back.

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You mentioned business partnering another
term that's, you know, again, not new,

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but it's definitely more prominent,

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I think these days when it
comes to accounting and finance.

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This whole conversation has a lot
to do with the future of work.

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And that's another hot topic, a phrase
that is getting thrown around a lot.

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So before we really dive into what all
of this means and the connection between

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the future of work transformation,
business partnering,

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I'm curious what you think about the
future of work. How do you define it?

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What are some of the main
considerations are really, you know,

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why listeners should be aware of what's
going on when people talk about the

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future of work?

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Yeah, to me, the future of work
really boils down to value creation.

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In other words,

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how can we as accounting professionals
add more value beyond what we

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have done historically
and what can now frankly,

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be done at lower rates in other
countries, or be replaced by technology?

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You know,

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we're evolving from the history of
being just scorekeepers to being

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trusted business partners.

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And that is someone that's going to
provide those insights to help drive

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decisions of the business. And, you know,

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the rate of change now is
greater than it's ever been in

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most industries and it's going to
continue to increase. So as accountants,

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we have to be better prepared to
change and help our businesses

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succeed in this.

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So we need to be able to evolve ourselves
and improve at least at the speed of

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our business. And why should
your listeners be, you
know, interested in that,

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frankly, so they don't get left
behind. I mean, I literally, you know,

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having their roles outsourced
overseas or replaced by

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technology accountants today really must
focus on continuing to develop their

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own business skills and be able
to articulate the value they're

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bringing to the business above, you know,

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debits and credits and internal controls.

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That's just not good enough
anymore and won't be in the future.

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So that's a great point.

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And we have a lot of conversations
about this and the need for upskilling,

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reskilling, and technology
is a big part of that.

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And we'll get to
technology coming up next,

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but to connect the dots in
our conversations so far,

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the accounting transformation
that you talked about,

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the specific why at SWM other initiatives,

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how is that preparing you and
your team for this future of work?

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You know, we're, we're focusing on,

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just business driven value,
integrators, predictive insights,

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how to help the future of our enterprise,
not just the enterprise today,

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but also getting the basics and
fiduciary portion of our jobs done

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efficiently and effectively,
leveraging technologies.

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We'll talk more about RPAs
and advanced analytics,

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automated AP online account
reconciliations, all those things.

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A great recent example has been
during the COVID-19 pandemic when the

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world was hit in 2020,

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suddenly we had our a hundred
plus accountants worldwide,
all working from home.

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Luckily we had already started our
journey and we'd implemented BlackLine

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systems,

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which is an online task management
tool and account reconciliation

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tool at most of our locations.

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So this it's a cloud-based tool that
you can really access from any browser

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and it's connected automatically
to our GL and subledgers.

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So we were able to prepare,

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close and prepare our
account recs and seamlessly,

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and it didn't really impact our
Sox controls, internal controls.

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So our internal auditors and external
auditors were able to audit and

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we were able to meet all our deadlines
while other companies might have been

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struggling to kind of change
things and have special actions

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taken during COVID-19.

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We were already prepared
in that front. Similarly,

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on the AP side, we had implemented,

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automated AP software
system called medias flow,

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where a lot of our vendors automatically
are emailing or sending invoices to

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that. And then the entire delegation of
authority is built in with them there.

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So, you know, whether it
comes to me or our CFO or CEO,

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we can review the invoice online,
whether it's a iPad phone, computer,

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whatever, and we can make sure that that
gets approved appropriately once good

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controls. So those are great examples
of things we've implemented to

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sort of make the blocking and
tackling if you will easier.

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but really saved us during the pandemic.

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And so we weren't really
behind the eight ball.

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We were kind of business as usual and,
felt that gave us an advantage. You know,

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we were able to file our
SEC filings on time and,

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you know, get our auditors,
everything they needed,

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the board was happy and still,

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we executed two acquisitions during
the pandemic where other companies were

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trying to figure out how to, you know,
just do the basic internal controls.

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So I think that really gave
us a competitive advantage.

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Those certainly are great examples and
it's great progress and a difficult time

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for many. I also appreciate the football
reference with blocking and tackling.

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I can always relate to that. So
good analogy there. And, you know,

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behind all of this, you, you started it
off and talked about it a little bit,

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obviously the main driver
behind transformation,

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the preparation and everything
that goes into the future of work,

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what you were able to
accomplish it's technology.

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And it talked a little bit about the
technological advancements you've invested

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in you've implemented and some of the,

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the improvements or the capabilities
that were there because of it.

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Can you take it a step further though,

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and talk a little bit about some
of the benefits, the rewards,

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as opposed to just, you know,

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being able to do your business like you
were talking about in a difficult time,

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how has technology enabled you
to take a step further as well?

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You know, in addition to, you
know, black, white, and medias,

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I mentioned the RPAs, which
is robotic process automation.

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And what that really is,

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is something that is a
computer software package that

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can mimic human behavior. So it
can log in to various systems.

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You can give the RPA, it's an email.

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you can have it as long as
it's kind of repeatable tasks,

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it can take data and manipulate
it and put it in other places.

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So a good recent example of that was
something actually we implemented during

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the pandemic.

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We used sold kind of like this on

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a Skype call and it all set up. And,

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we were able to kind of take
this program rule-based tasks

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and eliminate non
repetitive, or non value,

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repetitive manual work in
the process. For instance,

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we had a controller that was spending
a day during the close process,

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taking manufacturing, variances,

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and certain employee
costs and allocating them

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to multiple sites to multiple
product families and product lines.

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And this required downloads from
lots of systems, data manipulation,

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and literally hundreds of
uploads journal entries.

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So we were able to build an RPA that
now does that in the background in

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about an hour's time. And
so while that's happening,

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that same controller is now spending
that time on analytics and helping kind

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of get data more quickly to the
FP&A team, to the leadership team,

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to operations, to make
better decisions quicker.

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So really he's not working late
hours, just closing the books.

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The data is also happening, and we're
seeing the benefits of that, you know,

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already, you know, other
things, other tools,

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one stream as our
consolidation tool, which is,

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some of your listeners may be
familiar with like, Hyperion.

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And those are pretty common now
with large multinational companies,

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but for a company like us, we're doing
acquisitions and there's multiple ERPs.

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Just, the ability to consolidate
quickly pull that in and be in

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our SEC deadlines. And, you know,
we've implemented at least accelerator,

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which is a ASC 842, solution.

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And that helped us, you know,

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we've just bought some companies overseas
who had never had to do that before.

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So inputting that in quickly within the
quarter of being able to get them their

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journal entries, Workiva W-desk for
the filings, and then for analytics,

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we're using Altryx and I've used
Tableau in the past as well.

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And we're continuing to kind
of find new ways to use that,

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to help drive better decisions as well.

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So let's talk about all this
a little bit more, you know,

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he just brought in analytics and obviously
that's a key part of it. Technology,

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the driver behind a lot of the data
that's available, as you mentioned.

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So you've obviously had great success.

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You've seen the benefits of this
transformation and the use of

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technology. How do you recommend
going about it? You know,

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maybe our listeners aren't
working for these multinationals,

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these big companies that
already have this in place.

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Maybe it's part of a transformation
project they're planning,

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what are some of the best
practices or, you know,

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step-by-step things
that they can consider,

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in order to improve their
accounting or finance functions?

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Sure. I would, you know,

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I'd say one thing is don't try
to do too much too quickly,

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and there's going to be plenty of
salespeople, vendors, consultants,

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who are ready to sell you technology with
lots of promises that are going to fix

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problems you didn't even know you had.

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So I would say don't look for
a problem to leverage this cold

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technology for make sure you're actually
have something that is going to add

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value to the organization by you
implementing this, do your homework,

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make sure there's really real
value for you. For instance,

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if you're at a small company, you
may not need an automated AP system.

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You know what I mean? You
may have a small number.

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It may not be a ton of value
there to implement this,

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or there may be a lower cost
provider of some of these things

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online that, you know,

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larger companies might not look at so
that won't stop vendors and consultants

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trying to sell you these things that
you may not need. But, you know,

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I'd always say always start small, you
know, run a pilot, a proof of concept.

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So let's say you think
there really is value

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in implementing automated account
reconciliation software. There's Trintech,

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there's Blackline there's others. I
mean, I personally like BlackLine,

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used it at a couple of companies, but,
it's very, you know, it's not cheap,

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it's expensive technology.

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So you may not need all the bells and
whistles of a Blackline at a smaller

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company. You may not have,
you know, multiple locations,

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multiple locations that in different
countries where there may be a lower price

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that does everything you need.
So, you know, do a pilot,

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do a small taste, try. And if you can,

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if you can afford it,

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I would always suggest using
an implementation partner,

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the consultant that, has done
this many times before, and maybe,

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also using a third-party to help
kind of evaluate different vendors,

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because there are lots of products
out there for the different,

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whether it's AP, whether it's
RPA, whether it's analytics,

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there's tons of solutions.

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And I can't say one better than
another because they're better in

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different situations and for
different companies. So, you know,

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we've chosen the ones that were good
for our company for various reasons,

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but there may be a
different solution for you.

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So that gets back to doing your homework.

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So all those things,

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and then finally don't underestimate
what it takes to make these changes.

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You know, you can't do
it alone. accountants,

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sometimes aren't always the ones to get
up out of their desk and partner with

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other people in the business,
hopefully nowadays most do,

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but you have to work with
IT. If it's an AP automation,

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you have to work with
purchasing, you know, you can't,

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you can't do this in a box or
you're going to fail, you know,

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or you're going to implement this great
system and no one's going to use it. So,

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I think that's,

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it don't underestimate
and bring in all those key

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stakeholders that, are going to
be impacted by the technology.

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That's a great recommendation,
good suggestions.

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And I really like how everything
you're sharing ties back to, you know,

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the individual, why or the individual
is the individual, the department,

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the company, whatever, but it's all about
what, why, you know, the value to you.

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So, I appreciate you sharing
all that, all those steps.

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The last question I have for
you, if it's all right. And,

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I like to ask this question when
we're talking about transformation,

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the future of work, things like that,
obviously nobody has a crystal ball,

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but it's nice to kind of think about
what may be coming down the road next.

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Right. So when it comes
to the future of work,

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in the role of the accountant, or,
you know, the finance function,

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what do you predict is
going to happen? You know,

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you talked a little bit
about how transformation

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has changed a little bit because of
different things that happen in, you know,

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in the industry,

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but what else do you think our listeners
should be keeping an eye out for in the

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future?

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Yeah. And you know,

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I have thoughts on this and I would
say it's probably not going to be a

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tidal wave of all these things happening
at once. It'll happen more quickly,

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I think for the larger multinational
companies. But you know,

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some of these changes may not impact,

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the smaller, single owner companies
and things like that for quite a while.

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But overall, I see, you know,

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robotic process automation,

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mimicking of human actual become
cheaper and more easily available.

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They'll just become commonplace.

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So that gets back to learning more
valuable skillsets for the future

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accountants. And then as artificial
intelligence continues to advance,

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I think especially in the businesses
that can afford it and that can gain the

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most value from it will
continue to adopt things like

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cognitive optimization,
automation, sorry, and,

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and cognitive engagement is coming,
which will augment human judgment,

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human intelligence.

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So utilize machine learning, ultimately
predictive decision-making and,

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natural engagement with
humans. It'll be, you know,

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like the robo calls we get that'll turn
into business. I think in our lifetime,

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probably sooner than we
realize eventually we'll have,

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AI in our ERPs. And then our other
tools, I think this'll, like I mentioned,

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mimic human intelligence and eventually
completely replicate interactions and

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possibly even make decisions. So we
all have to stand in front of that.

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You know, I think our
government and agencies,

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our auditors and others will continue
to use these tools for their own use.

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And there'll be more continuing
monitor continual monitoring

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of financial activities, and of
accounting. And you know, like I said,

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it'll eventually trickle down
to the smaller businesses,

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but I think kind of the
large multinationals will
probably be hit first by

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the auditors and government and they
better stay in front of it in themselves

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too. So, that's how I see. And I think
some of that's already happening,

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you know, and I just think it's going to
be next five, 10 years, not, you know,

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50 years.

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This has been Count Me In, IMA's podcast,

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providing you with the latest
perspectives of thought leaders from the

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accounting and finance
profession, if you like,

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00:19:43,681 --> 00:19:47,040
what you heard and you'd
like to be counted in for
more relevant accounting and

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00:19:47,041 --> 00:19:48,090
finance education,

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visit IMA's website at www.imanet.org.