Abdul Khaliq
Empowering Finance Professionals with Strategic Career Progression | Sharing Knowledge to Boost Learning
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4 Pillars of Financial Governance Financial Governance is a vast area. I have focused on four key pillars and included a few examples.Can you think of other pillars that could be added to the list?Here are the 4 Pillars:1๏ธโฃ ๐๐ป๐๐ฒ๐ฟ๐ป๐ฎ๐น ๐๐ผ๐ป๐๐ฟ๐ผ๐น๐Internal Controls are put in place to achieve objectives, mitigate risk, and ensure that resources are used appropriately.๐๐ ๐ฎ๐บ๐ฝ๐น๐ฒ๐:- Segregation of Duties- Delegation of Authority- Policies & Procedures2๏ธโฃ ๐๐๐ต๐ถ๐ฐ๐ฎ๐น ๐๐ผ๐ป๐ฑ๐๐ฐ๐Ethical behavior is essential for maintaining trust and integrity in financial governance. This pillar stresses the significance of ethical decision-making in all financial activities and transactions.๐๐ ๐ฎ๐บ๐ฝ๐น๐ฒ๐:- Transparency & Accountability- Confidentiality- Fairness & Equity- Avoiding Conflict of Interest3๏ธโฃ ๐๐ฎ๐๐ฎ ๐ถ๐ป๐๐ฒ๐ด๐ฟ๐ถ๐๐ & ๐ฆ๐ฒ๐ฐ๐๐ฟ๐ถ๐๐Data integrity ensures the accuracy and consistency of data throughout its lifecycle.Data security protects digital information from unauthorized access, theft, or corruption.๐๐ ๐ฎ๐บ๐ฝ๐น๐ฒ๐:- Processing- Transmission- Storage, Backups, Encryption- Access Control- Error Detection Code, Firewall4๏ธโฃ ๐๐ผ๐บ๐ฝ๐น๐ถ๐ฎ๐ป๐ฐ๐ฒ & ๐๐๐๐๐ฟ๐ฎ๐ป๐ฐ๐ฒCompliance pertains to adhering to a particular industry's laws, regulations, and standards.Assurance refers to giving impartial and unbiased evaluations of financial data and activities.๐๐ ๐ฎ๐บ๐ฝ๐น๐ฒ๐:- Financial Reporting- Financial Audit- Tax Compliance- Risk Management#MAKAlpha#TheFinanceMasterclassComing Soon!-------------------------------------------------------- FollowAbdul Khaliq+ ๐ - Sharing the essence of 20+ years of journey.- I mentor and train finance and account professionals. DM for details.- You can download all my work in PDF format by visiting my profile.
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Abdul Khaliq
Empowering Finance Professionals with Strategic Career Progression | Sharing Knowledge to Boost Learning
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๐ Establishing internal controls, clear policies, ensuring compliance and data integrity are the key pillars of ethical financial governance. What's your key principle for maintaining financial governance and integrity?
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Tariq Munir
Speaker | Digital Transformation | Finance Transformation | Process Optimization
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Great examples and very well articulated Abdul. Financial Governance is a key to a sustainable business growth.
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Wassia Kamon, CPA, CMA, MBA
Finance Executive | Keynote Speaker | Guest Contributor | 2x 40 Under 40 CPAs
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I would add 5๏ธโฃ Leadership and Management Training. Leadership set the tone for risk management, ethics, and the importance of internal controls throughout the organization.Great topic, Abdul!
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Nancy Ambrose
๐ Elevating Accountants' Communication | English Mastery for Finance Pros | 12 Years Expertise & Certified Educator
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Great topic Abdul. ๐๐ผFinancial governance is crucial for ensuring transparency, accountability, and responsible management of financial resources within organizations. As mentioned, it helps maintain integrity, mitigate risks, and build trust among stakeholders, essential aspects for Accountants operating in a globalized business environment.
Zia Rezvi
Compliance Project Manager | GRC Consultant | Finance and Audit Career Coach | French-speaking | Excel Addict | AI Start-up and Non-profit Advisor | Certified Scrum Master | Mentor | ACMA
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Am absolutely great post Abdul Khaliq
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Adrian Hart BSc (Hons) FCMA CGMA FMAAT
Accountant & Business Consultant
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Every business needs these pillars of governance in order to protects its resources including its employees
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Gary Jain ๐
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Indeed Abdul Khaliq, Financial governance relies on internal controls, ethical conduct, data integrity, and compliance. These pillars uphold accountability, trust, and accuracy in financial practices, ensuring security and adherence to regulations.
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Zia Rezvi
Compliance Project Manager | GRC Consultant | Finance and Audit Career Coach | French-speaking | Excel Addict | AI Start-up and Non-profit Advisor | Certified Scrum Master | Mentor | ACMA
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Alina L. Yusuf Abdoollah
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Mohamed Abd El Gelil Ibrahim,MBA ,C IFRS Sโข,MInst ILM,CM
Financial DirectorEx: Group Financial controller Alfaisaliah, Ex: Finance Manager/Controller at Trane For Manufacturing Air Cond.,Ex: Group Finance Director: MENA, Domino's Pizza & Dunkin D,Ex: JV of AlSafi Danone
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Thanks Abdul Khaliq for sharing your insights, I agree with you and maybe I can consider Risk Management as important part can be stand alone which will have cross activities over the other pillars as well...
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Woodley B. Preucil, CFA
Senior Managing Director
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Abdul Khaliq Very informative. Thanks for sharing.
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Abdul Khaliq
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Intercompany Transactions ExplainedDefinition | Transactions | Elimination | ExampleEntities with various subsidiaries have challenges reconciling and eliminating the due to and due from at the consolidation level. Here are some of the challenges:1- Company A sent a debit/credit note to Company B. Company B failed to record it before the month-end close.2- Company C sent the debit note late to Company D. Company D had already closed their books and recorded it the following month.3- Company E recorded the transitions as I/C receivable, but Company F recorded them as Accounts Payable.4- Company G sent a debit note but Company H had a dispute with it, didn't record it and closed the books without resolving it.5- Company I sent a balance confirmation request, but Company J didn't confirm the balance before the month-end close.Here are some suggestions:1- Keep a cut-off date for sending/receiving/recording/reconciling intercompany transactions.2- Every company must adhere to the deadline.3- Every company must confirm the balance in writing. That is also needed for the audit. 4- Every company must prepare an intercompany reconciliation and promptly address the variances. 5- Any disputed transactions must be resolved.There are two things you need to do to make the elimination easier:1- Before the month-end close, all intercompany should be reconciled, and thebalance must be confirmed. There is no other way. 2- Everyone involved must understand the elimination process and the significance of reconciling intercompany balances.The information included will help you create awareness of the importance of reconciling intercompany before the month-end close. Here's what is included:1- Definition and Example2- Types of Intercompany Transactions3- Consolidation and Elimination4- Impact on Financial Statements and DisclosuresExample Included:Company A pays $10,000 on behalf of Company B for office supplies.โข Company AI/C Receivable: $10,000 Dr Cash: $10,000 Crโข Company BOffice Supplies Exp.: $10,000 Dr I/C Payable: $10,000 CrConsolidation Processโข When preparing consolidated financial statements at the parent level:โข Eliminate the intercompany transaction:โข Decrease Company A's Intercompany Receivable by $10,000.โข Decrease Company B's Intercompany Payable by $10,000.After Consolidationโข Consolidated Income Statement: Reflects the office supplies exp. by Company Bโข Consolidated Balance Sheetโข Decrease in Cash paid by Company Aโข Eliminates the intercompany receivable and payable. #MAKAlpha #TheFinanceMasterclass coming soon!------------------------------------------- FollowAbdul Khaliq+ ๐ - Sharing the essence of 20+ years of journey.- I mentor and train finance and account professionals. DM for details.- You can download all my work by clicking "View my portfolio" above.
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Abdul Khaliq
Empowering Finance Professionals with Strategic Career Progression | Sharing Knowledge to Boost Learning
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Accounts Receivable ProcessCustomer Acquisition to Payment CollectionSales and revenue are great, but only once cash is collected.I have seen the sales team's excitement and celebration when acquiring new customers.I have also experienced teams pushing to get the credit approvals and customer agreements signed without performing adequate due diligence and credit checks. That sometimes leads to cash flow issues, payment collection delays, and bad debts.So sales are great, but timely cash collection is more significant. That's why every companymust have robust customer due diligence and accounts receivable processes, from the largest to the smallest.I have prepared a step-by-step process for you to replicate and adjust according to the type and size of your organization.You'll find details of these steps:1- Customer Acquisition2- Negotiating & Diligence3- Order Processing4- Invoicing 5- Monitoring & Follow-up6- Payment Due Reminders7- Payment Collection8- Reconciliation9- Record Transactions10. AR Reporting11- Delayed Payments12- Dispute ResolutionWhat else can you add?#MAKAlpha #TheFinanceMasterclass Coming Soon!------------------------------------------------------------- Follow Abdul Khaliq + ๐ - Sharing the essence of 20+ years of journey.- I mentor and train finance and account professionals. DM for details.- You can download all my work in PDF format by visiting my profile.
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Abdul Khaliq
Empowering Finance Professionals with Strategic Career Progression | Sharing Knowledge to Boost Learning
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Accounting to ReportingYour journey from accounting to reporting does not start with transactions.It starts with designing a Chart of Accounts that is fit for purpose, not for existing needs, but that caters to the growth of your organization.Once you have designed your CoA in a certain way, redesigning it may take much work.Transactions are the second most crucial element of your entire accounting system. Your reporting will depend on the level of accuracy of your transactions.The third thing you want to focus on is mapping your trial balance and the medium you use for consolidation and reportingโany tool you have, whether Excel or some other software, can be used.I have designed the process keeping all of this in mind. What do you think?Please keep this in consideration when you design your processes:๐๐๐๐ฅ๐ง ๐ข๐ ๐๐๐๐ข๐จ๐ก๐ง (๐๐ข๐) A well-structured Chart of Accounts (COA) is the backbone of an organization's financial management and reporting.When designing a CoA, keep this in mind:โข Scalability and GrowthA thoughtfully designed COA can accommodate future growth seamlessly. โข Financial Analysis and ReportingA comprehensive COA allows for the customization of reports to meet these evolving demands, whether for internal management or external stakeholders.๐ง๐ฅ๐๐ก๐ฆ๐๐๐ง๐๐ข๐ก๐ฆ Transactions are nothing but an accumulation of:โข Accuracyโข Reliabilityโข Controlsโข Attention to Detailsโข Adherence to Policies & Procedures and Delegation of Authority๐ง๐ฅ๐๐๐ ๐๐๐๐๐ก๐๐ The Trial Balance is not your P&L or your Balance Sheet. It is a consolidated position of all transactions based on the Chart of Accounts totaling zero. However, its accuracy is crucial for your consolidation and reporting.๐ ๐๐ฃ๐ฃ๐๐ก๐ The accuracy of the mapping between the ERP system and the consolidation tool is the key. When mapping, ask yourself:โข How and what do you want to see as an output, i.e., management or financial reporting?๐ฅ๐๐ฃ๐ข๐ฅ๐ง๐๐ก๐Now, the quality of your reports depends on the consolidation and reporting tool you use or how brilliant you are in designing your Excel models. #MAKAlpha #TheFinanceMasterclass coming soon!----------------------------------------- FollowAbdul Khaliq+ ๐ - Sharing the essence of 20+ years of journey.- I mentor and train finance and account professionals. DM for details.- You can download all my work in PDF format by visiting my profile.
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Abdul Khaliq
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Financial Controller PathwayEducation | Technical Skills | Soft Skills | Leadership SkillsHaving a well-laid-out plan in front of you with every move meticulously planned is a half-battle won.The other half is executing the plan. This is where most of the struggle is. Execution!Here's your step-by-step pathway to becoming a Financial Controller. Every step is planned for you, starting from graduation to financial controller. Now, you have to customize this plan for your situation and execute it. Go for it!These steps are provided as overall guidance. Some steps can be completed before the others. For instance, you may prefer to complete your CA/CPA before you start the first job. Or begin focusing on your soft skills when you get your first job.What other steps can you think of, and how will you plan them?This is your pathway:1- Bachelor's DegreeObtain a bachelor's degree in finance and accounting or business.2- Entry-Level PositionObtain a bachelor's degree in finance and accounting or business.3- Technical SkillsAcquire technical accounting skills, including financial statement analysis and financial reporting. Focus on mastering accounting software and Excel.4- Professional CertificationPursue a professional certification such as CPA, CA, ACCA, CMA, or similar.5- Job RotationIt is time to look for job rotation opportunities if you have not already done so. 6- Accounting ProcessesBy now, you should have a better understanding of accounting processes. Proactively look to improve current processes.7- Acquire Soft SkillsIt is almost time to assess your soft skills and what you want to improve. Communication is a vital skill to have.8- Team ManagementDemonstrate that you have the skills to manage teams. 9- Progressive ExperienceNow, you have to look for opportunities within or outside of your organization to move up the career ladder to positions like senior accountant, financial manager, or finance manager.10- Technology ProficiencyBecome skilled in using financial software such as ERP systems. 11- Compliance & Risk MitigationFocus on strengthening your knowledge and expertise in internal controls, risk mitigation, regulatory compliance, and managing audits.12- NetworkingAttend finance and accounting conferences, join industry associations, and connect with peers and mentors. 13- Mentorship or CoachingIdentify a seasoned financial professional who can serve as your mentor. Alternatively, consider hiring a career coach.14- Prepare for LeadershipAttend leadership training programs, seek mentorship, and develop strategic thinking skills. 15- Pursue the FC PositionYou are ready now. Look for Financial Controller positions internally or externally.#MAKAlpha#TheFinanceMasterclassComing Soon!-------------------------------------------------------- FollowAbdul Khaliq+ ๐ - Sharing the essence of 20+ years of journey.- You can download all my work in PDF format by visiting my profile.
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Abdul Khaliq
Empowering Finance Professionals with Strategic Career Progression | Sharing Knowledge to Boost Learning
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Income Statement - Revenue to Net Profit MovementWhat causes the change from the revenue to EBITDA to Net Profit?Observing the movement on the chart below will help you understand the cause of change. Below are the explanations and calculations for each step depicted on the chart:Revenueโข Revenue, also known as sales or turnover, is the total amount of money a company generates from its primary business activities. COGS โข COGS refers to the direct costs associated with producing or manufacturing the goods or services that a company sells. Gross Profitโข Gross Profit is the amount of money a company has left after subtracting the direct costs of producing its goods or services (COGS) from its total revenue. โข GP = Revenue โ GOGSOPEXโข OPEX are a companyโs ongoing costs to operate its business. Include items such as rent, utilities, salaries, and marketing expenses. Other Incomeโข Other Income refers to revenue generated by a company that is not directly related to its core business operations. This can include income from investments, interest, or other sources outside the company's primary activities. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)โข EBITDA is a measure of a company's operating performance. It excludes interest, taxes, and non-cash expenses like depreciation and amortization.โข EBITDA = GP โ OPEX + Other IncomeEBIT (Earnings Before Interest & Taxes)โข Depreciation and amortization are non-cash expenses that represent the allocation of the cost of tangible and intangible assets over time. โข EBIT = EBITDA โ DepreciationEBT (Earnings Before Taxes)โข Interest expenses represent the cost of borrowed funds. Subtract interest from the Adjusted EBITDA.โข EBT = EBIT โ Interest ExpenseNet Profitโข Subtract taxes from Earnings Before Taxes to arrive at Net Profit.โข Net Profit = Earnings Before Taxes - Taxes#MAKAlpha#TheFinanceMasterclasscoming soon!------------------------------------------- FollowAbdul Khaliq+ ๐ - Sharing the essence of 20+ years of journey.- You can download all my work in PDF format by visiting my profile.
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Abdul Khaliq
Empowering Finance Professionals with Strategic Career Progression | Sharing Knowledge to Boost Learning
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Accounts Payable ProcessReceiving Invoices to Releasing PaymentAccounts Payable is close to my heart. I started my finance and accounting career as an AP Accountant.Probably that's why the first course I developed was on "A Practical Approach to Managing Accounts Payable."Performing that role allowed me to acquire valuable knowledge and experience. The knowledge acquired at that time laid the groundwork for many years to come.If you are an accountant payables, always remember that your job is not merely accounting. You are the gatekeeper of every expense paid in the company. Your role is significant, from receiving and validating invoices to accurate expense coding to ensuring the correctness of every cent paid. - If you do not do three-way matching, never received items may be paid.- Your financial reporting will be inaccurate if you misallocate a GL code.- If you pay the incorrect amount, that's a potential loss to the company.Now you know how significant your role is.Broadly, this is what your role entails:1. Invoice Receiptโข Accounts Payable (AP) accountants are responsible for receiving vendor invoices.2. The Digital Ageโข Embrace the digital age by implementing the process of document scanning and digitization of invoices. 3. Primary Responsibilityโข It is the primary responsibility of AP Accountants to validate invoices thoroughly. 4. Invoices Validationโข Develop a keen eye for identifying discrepancies or errors in invoices. โข It prevents financial discrepancies and potential disputes5. Three-Way Matchingโข The three-way matching is a best practice in AP. โข Cross-referencing the invoice with the purchase order and receiving report.6. Understanding Codingโข AP accountants must understand the intricacies of expense coding and account allocation.7. Expense Allocationโข AP accountants must correctly assign expenses to the relevant departments or accounts within the organization.8. Organizational Prioritiesโข Approval hierarchies involving various stakeholders, such as department heads, managers, and finance.9. Approval Workflowโข Learn strategies for optimizing the approval workflow by setting deadlines and communicating efficiently with approvers.10. Payment Termsโข Prepare payments based on the approved invoices and payment terms agreed with the vendor.11. Payment Methodsโข Payments can be made through various methods, such as checks, electronic funds transfers (EFT), or credit cards.12. Segregation of Dutiesโข It is crucial to segregate the invoice and payment processing to avoid errors and fraud. What else can you add?๐ก ๐๐ฉ๐ช๐ด ๐ช๐ด ๐ฑ๐ข๐ณ๐ต ๐ฐ๐ง ๐ต๐ฉ๐ฆ "๐๐ณ๐ข๐ค๐ต๐ช๐ค๐ข๐ญ ๐๐ฑ๐ฑ๐ณ๐ฐ๐ข๐ค๐ฉ ๐ต๐ฐ ๐๐ค๐ค๐ฐ๐ถ๐ฏ๐ต๐ด ๐๐ข๐บ๐ข๐ฃ๐ญ๐ฆ" ๐ค๐ฐ๐ถ๐ณ๐ด๐ฆ.#MAKAlpha#TheFinanceMasterclasscoming soon!------------------------------------------- FollowAbdul Khaliq+ ๐ - Sharing the essence of 20+ years of journey.- You can download all my work in PDF format by visiting my profile.
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Abdul Khaliq
Empowering Finance Professionals with Strategic Career Progression | Sharing Knowledge to Boost Learning
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Payroll Processing - SOD between Finance and HRPayroll can be a political tug-of-war between finance and HR.I have seen that happen in my professional career. Twice!I have experienced two scenarios.Scenario OneThe company was rapidly growing. Both finance and HR needed more resources and were overwhelmed with work. They were fighting that payroll is the other team's responsibility.Scenario TwoRestructuring was taking place. Jobs were being evaluated. The team with the most responsibilities gets to retain more team members, and some can even get their jobs evaluated higher (hint: that's promotion).Guess what?This time, both teams were fighting to retain payroll processing. Nevertheless, I have end-to-end payroll processing with HR in most cases. Finance is the reviewer and disburser of funds. Based on that, I have presented this distinction of roles.Well, I know. A lot depends on the organization's size, industry, management preference, policies, and procedures. One thing is certain: the less people have access to and knowledge of payroll details, the better it is for confidentiality. That being said, it makes sense that payroll processing sits with HR, and Finance only reviews it for accuracy and compliance without having access to specific employee details. This is the overview of the process:Human Resource- New Hires and Terminations- Employee Data Management- Benefit Administration- Payroll Queries- Compliance- Payroll ProcessingFinance- Payroll Review- Tax Compliance- Payment Distribution- Accounting Entries- Payroll Reporting- Audit Support (Joint Responsibility)What is the process based on your experience?#MAKAlpha#TheFinanceMasterclassComing Soon!-------------------------------------------------------- FollowAbdul Khaliq+ ๐ - Sharing the essence of 20+ years of journey.- I mentor and train finance and account professionals. DM for details.- You can download all my work in PDF format by visiting my profile.
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