S. 48 / KEY # 3
ARTICLE
Annual data is like driving with your eyes closed
If you control your company only financial statements, it is like driving with your eyes closed. Therefore, Nicholas Meilstrup focused on using corporate financial data to create an overview in real time. Better use of data, among others, help to make the auditor to a better adviser.
Member Magazine for FSR - Danish Auditors
ARTICLE
KEY # 3 / S. 49
Annual data is like driving with your eyes closed
ANNUAL DATA IS LIKE DRIVING CAR WITH CLOSED EYES value to businesses by using these data for ongoing Text/ Jacob Holm, Senior Consultant, FSR -
monitoring of the companies' finances. This use of the
Danish Auditors
companies' data is also an area where accountants and
Illustration/ Rasmus Juul
bookkeepers should focus, evaluates Nicholas Meilstrup.
"If I have to provoke a bit, so I would say that if you manage your business on the annual accounts, it's like driving a car
"The annual accounts have a lot of good qualities, but it has the
on the highway with your eyes closed throughout the year.
serious shortcoming that it is year-wonder. We have a lot of
Open your eyes once a year to brief you and then close them
auditors who say that when they sit at the annual meeting with the
again and hope that you do not hit anything during the next
customer, so they sit and look at the numbers that are 15-17
year, " Sounds opening reply from Nicholas Meilstrup, CEO of
months old. What the business owner can use it for? "
fintech-the undertaking CrediWire.
asks Nicholas and continues:
"Can we instead stick a finger in the ground every three CrediWire is a system that collects financial information in
months or every month and see how the coverage is in
real time for small and medium-sized enterprises.
terms of budget, how does it look compared to the
CrediWire will create
industry, and
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S. 50 / KEY # 3
Annual data is like driving with your eyes closed
where the company makes money, so it also opens for
Is the annual report on the way out?
the auditor to provide better ongoing advice. "
Just annual seen in many smaller companies as something to be prepared, because the law says so, or the bank requires it. This makes reporting a burden that does not
The financial information that CrediWire based, comes
create value. The image will Nicholas to challenge.
primarily from the company's ERP system, for example book-keeping data and point of sale data. In addition, the system retrieves also all annual reports and other publicly available data from Virk.dk. All these data are collected and
"For example if you look at the local butcher, then compile and
structured in real time and used to give companies an
submit the annual report, because they have to. They have to pay
overview to be open for the company and its advisors can
VAT and is required to switch delivering an annual report. They do
make financial analysis in real time and benchmark the
it not for their own sake. That's what we're trying to challenge. "
undertaking against others in the same industry. he explains, and continues:
"What if the butcher could see the value in making more detailed and more frequent posting. Will they do it? Some of Jumping with economic background
those we work with, ask actually bookkeeper to increase
Nicholas describes himself as a bit of a jumping jack with a
frek- vensen and detail level, because they see the value in
background in accounting and financial management. He
having a comprehensive overview. Should we be
has, among other wheel pet McDonald's to open
completely peas just so serve businesses no more money
restaurants, has had a liquor company that imported luxury
that is being made debit / credit. There is no value-added in
spirits to Denmark, helped to open 19 boutiques and has
the activity, but it is essential that we make value-adding
produced it-in infrastructure for the textile industry. In a
activities as giving the company an overview, or let the
world where technological developments rapidly moved ter
auditors provide advice. "
tasks from human to machine trades it to use its skills where they create value - a first writing could, according to Nicholas be shifting focus from defining annual accounts for advice, when the auditor is out with SME customers.
Credit accounts and banks The annual report, as the primary gateway to financial
man who, together with his advisor ups favored accounts, which
information about a company is also in the firing line if
was easier understanding enced and palatable to the bank, after
companies choose to focus more on getting a continuous
which they got a clear dialogue, which gave more transparency -
overview. With a detailed overview, which can be supplied
and then dropped his rate two percentage points. "
continuously, this data will also be of value to banks and
"I think that auditors have an important role if they feel like
trading partners. Here auditors should have an eye for their
it. It is a question of attitude whether one would like to
ability to contribute value, says Nicholas.
More transparency for better or worse
assist with more advice and not only establish the annual
When it comes to interaction between undertakings and
report "
bank believes Nicholas, that it is the increased transparency that is key to a better cooperation. When a company called
assesses Nicholas.
I think that auditors have an important role if they feel like it. It is a question of attitude
"We believe that if accountants, banks and companies talk
today for example, takes its auditor in the bank to answer
more together, we will get healthier businesses through
questions when the loan must be renewed or to negotiate
more dialogue. It's ultimate desire of banks - from our
new loans, so increasing the company through the auditor's
vocational faring - if the auditor quarterly able to make, not
knowledge transparency, making it easier for banks to
a full audit, but a light revision or something similar. So look
make the right decisions.
through the numbers and say, with these reservations, so the figures are true and fair, " Nicholas says, adding:
whether one would like to assist with more
"Banks in Denmark have an average coverage ratio of 2.1
advice and not only establish the annual
percent. It's very small market mannequins. This means that
report.
"We have tried to support, so we open the background
banks can not afford to make mistakes. So every time they have
data that the auditor can examine and assess.
doubts, they need to say no, " Nicholas explains and elaborates:
Subsequently, the auditor stamp figures and say that they are true. Thereby gets the bank regularly reports to the Nicholas Meilstrup, CEO of CrediWire
auditor's stamp and reporting opens up the company to get
"If we can remove some of the doubts, because there is more
regular sparring from both the bank and the auditor. I know
transparency, we get more peace in the stomach to make
a land
decisions. Straight metal get, whether it makes more or less money for the are-
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KEY # 3 / S. 51
Annual data is like driving with your eyes closed
trader, then it is good. Should I go bankrupt, I would
the auditor signing the accounts are true - not true " says
rather that the bank helps to pull the plug in good time, so
Nicholas.
I end up with a minus the 200,000 and not two million crowns. "
If a continuous overview will be of value - and if annual, quarterly or monthly financial statements
When is posting data 100 percent correct?
should ultimately be generated automatically from the
If data quality is lousy, we can not make good advice on it. Is the data quality good,
data, it also requires a higher quality of accounting data.
we can make good advice. Good advice
The challenge to establish the true picture lies largely in
Here the auditor may help to ensure that the quality is
the quality of the data contained in corporate finance
good, so you do not make decisions on an incorrect basis.
can either save or earn the company more
systems. In practice they are rarely - or al- very rich - 100
money. Every time we deliver what we can with good justification send a bill for the
percent accurate, for example if a document is posted
work we have done
incorrectly, or if a number of invoices not yet come into the system. In addition, the interpretation of the various
"We must first of all agree on what checks are to be made
transactions impact on the overall picture.
to say that it is true. These checks are we still should be supplemented by people to ensure the quality. IT can help support, so we can be better, but there are a great many years before IT in this context can replace people, "says
Nicholas Meilstrup,
Nicholas and elaborates:
CEO of CrediWire
"If I bought a Coke, it will be so in practice recorded as personnel costs or representation? Yes, it may come depends on whom I have drunk it with, but in fact, many Annex charged rapidly and the correct allocation is
"If data quality is lousy, we can not make good advice on
subjective. I buy a computer for 11,000 kroner, I choose to
it. Is datakvali- lead good, we can make good advice.
Data-driven audit
expense it or turn it on? My point is, when is a financial one
Good counseling can either save or earn enterprise need
Many accounting firms have already begun to take the first
hundred percent correct? It's probably never will. That is
more money. Every time we deliver what we can with
steps towards a more data-driven audit. CrediWire work
also why,
good justification send-opera- tion on the work we have
with some of the major accounting firms, where they are
done. "
running pilot projects in the audit section.
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S. 52 / KEY # 3
Annual data is like driving with your eyes closed
Someone moves up, others do not. I see it is that the sooner one begins to practice, the more likely it is that one is on the score when it happens. Nicholas Meilstrup, CEO of CrediWire
"By making the review process more data-driven, the idea that we can save some time. In short, the idea that some processes need people make. Especially those where you
BLUE BOOK: NICHOLAS Meilstrup
have to think about. Then there are tasks that are very repetitive. It is better to let computers do these things. We should try to get the computer to help with the tasks that we do not even suited us best, " says Nicholas and uses
Education:
samples as an example.
Bachelor in international business, Business School, Master in Accounting Strategy and Control Business School.
"In an audit, there are many tasks, some of which is to take samples. If I for example, has 20,000 documents, it is not
Career:
appropriate that my auditor checks all 20,000 documents.
Nicholas has among other things helped
The recommendations take into far too long. Therefore, we
McDonald's to open restaurants, had a
take samples. The work computer can do. So instead of
liquor company, which imported luxury
taking samples, the computer can check each Billing and
spirits to Denmark, helped to open 19
put this data rather auditor who looks at the decisions he /
boutiques and has produced IT
she will make based on this. Should, for example made
infrastructure for the textile industry.
reverse entries or marks are given? "
Today he is founder and CEO of CrediWire.
Accountant industry is like the clothing industry 15 years ago
When it comes to the question whether widely Nicholas sees that preparers take the new opportunities for
Moreover, points out Nicholas Meilstrup public business data
themselves, pulls out a patent rallel for the clothing industry
"Say thank you to the Danish Business Authority. All the structure we have in Denmark because of Danish Business
of the past 14-15 years has been told so much that they
Authority, is a luxury we do not always recognize. It is a tremendous service and I think we all have to thank the Danish
have to selling clothes online.
Business Authority to make it here.
We are also established in Germany, where they do not have the same structure of government data. Germany
"15 years ago it was one percent of tøjsalget that happened
does not have the same requirements for annual reports and you have eg no public register of owners. It requires
online. Today, I think we are over 25 percent. The clothing
that we in Germany are doing all the work done by the Danish Business Authority has made at home - and it costs
stores, which have diverted themselves and have sold clothing
some money and takes a lot of time ".
online, has not lost to selling clothes online. Those who are not converted themselves, have lost. But no matter how much was written about the necessity of selling online, there was someone who went with, and someone did not. I look a bit the same in the accounting profession. Someone moves up, others do not. I see it is that the sooner you start to practice,
Theme Series about accounting data as leverage
This is the first article in a series of articles in SIGNATURE on accounting data as leverage. The theme focuses on the the more likely it is that one is on the score when it happens " ends Nicholas. •
opportunities provided by auditors in connection with advising and creating additional value compared to the fact that more and more companies are using digital and automated processes in bookkeeping.
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