Blue Onion Labs Inc.

12/28/2023

What is the role of an audit committee in corporate governance?
As accountants we know that companies face a myriad of financial reporting challenges and regulatory requirements. An audit committee, composed of independent directors, serves as a crucial oversight body, ensuring the accuracy and reliability of financial reporting, the effectiveness of internal controls, and the independence of external auditors.

Key Responsibilities of Audit Committees:

1️⃣ Financial Reporting Oversight: Audit committees play a pivotal role in overseeing the financial reporting process, ensuring that financial statements are prepared in accordance with accounting standards and accurately reflect the company's financial position and performance.

2️⃣ Internal Control Assessment: Audit committees evaluate the company's internal controls, designed to prevent fraud, errors, and safeguard assets. They assess the adequacy of internal controls and recommend improvements to mitigate risks.

3️⃣ External Auditor Oversight: Audit committees select, appoint, and oversee the external auditors, ensuring their independence and competence. They review the auditor's reports and address any identified deficiencies in internal controls.

Why Audit Committees Matter:

✔️ Enhanced Transparency and Accountability: Audit committees promote transparency and accountability by providing an independent perspective on the company's financial reporting and internal controls.

✔️ Stakeholder Protection: Audit committees safeguard the interests of shareholders and other stakeholders by ensuring the accuracy and reliability of financial information, thereby fostering trust and confidence in the company.

✔️ Risk Mitigation: Audit committees play a proactive role in mitigating financial and operational risks by identifying and addressing potential control weaknesses and ensuring compliance with regulations.

12/26/2023

Fintech Lender Affirm Is Poised to Expand in a Higher Rate Environment (https://hubs.ly/Q02bY1Ls0)

Affirm Holdings, a buy-now-pay-later company, is expecting an increase in demand for its short-term consumer loans even as interest rates remain high. The company says that its short-duration and transaction-level approval process makes it a more attractive option for consumers in a higher interest-rate environment.

“I want to buy a thing. It costs $500. It’s going to cost me $30 in interest, and that makes sense.”

Consumers are more likely to understand the cost of a loan when it is expressed in dollar terms rather than as an interest rate or annual percentage rate. Part of the value of a lending product like Affirm is in the simplification for the consumer. Affirm's CFO believes that this simplification makes it easier for consumers to make decisions about borrowing money, and that demand for Affirm's loans will increase even if interest rates rise.

How do you feel about Affirm's way of simplifying loan costs for consumers by expressing them in dollar terms instead of interest rates? How might this approach influence consumer decisions, especially in a higher interest-rate environment? Share your thoughts below! 👇

Customers are willing to pay higher rates for short-term loans, according to Michael Linford, finance chief of the buy-now-pay-later company.

12/21/2023

What’s important to a future CFO? (https://hubs.ly/Q02bY0MR0)

This PwC article mentions that future CFOs not only need technical skills in finance and accounting but also must be data-driven leaders, possess broad business experience, embrace technology, and communicate effectively with investors and the board of directors.

Here are some key steps you can take to stand out as a future CFO:
✔️ Use data to provide insights that support business decisions, drive cost reduction, enhance sustainability, and achieve strategic goals.
✔️ Gain broad experience in other areas of the business to develop a broader perspective.
✔️ Use technology to upgrade digital processes and make informed decisions quickly and effectively.
✔️ Develop investor and board readiness. Learn how to communicate with investors and the board of directors effectively.
✔️ Seize opportunities to practice your presentation style, executive presence, and communication skills.

As we approach the end of the year, we reflect on our professional accomplishments and our goals for next year. It’s crucial to identify areas where we can further develop our skills and expertise that would take us to the next level professionally. Those who actively pursue opportunities to take charge and increase their responsibilities put themselves in the best position to advance and succeed.

Happy holidays! 🥂

How do you transition to CFO? See the important leadership skills and competencies future CFOs should have to stand out and prepare for the next career move.

12/19/2023

Gen AI: A guide for CFOs (https://hubs.ly/Q02bY1pM0)

Great article from McKinsey on Generative AI, which is rapidly transforming the finance function, offering a powerful toolset to enhance efficiency, productivity, and decision-making. By automating repetitive tasks, augmenting human capabilities, and accelerating processes, AI is empowering finance professionals to focus on higher-value activities and drive strategic growth.

It’s helpful to think about how AI can help in specific instances or finance applications, including:
✔️ Summarize information and help create charts and visualizations from natural language queries
✔️ Analyze financial data and identify performance trends
✔️ Generate first drafts of financial reports and external reporting
✔️ Automate manual work such as reconciling financial data, identifying working capital opportunities and assessing customer creditworthiness

How should CFOs approach generative AI—enterprise-wide and in the finance function—and what can they do right now to rapidly climb the learning curve?

12/14/2023

Unclaimed Gift Cards and Your Business: What You Need to Know

Gift cards are a popular form of payment, but they can also become unclaimed property if they are not redeemed within a certain period of time. This can have a significant impact on your business, as you may be required to escheat the value of these cards to the state. (Reference article by RSM, Retailers must be mindful of gift card tax pitfalls - https://hubs.ly/Q02bXSpG0)

❓ What is unclaimed property?
Unclaimed property is any tangible or intangible personal property that has been abandoned or where the owner cannot be located. This includes gift cards, as well as other types of property such as bank accounts, stocks, bonds, and safe deposit boxes.

❓ What are the escheat laws?
All states have escheat laws that require companies to turn over unclaimed property to the state after a certain period of dormancy. The dormancy period varies from state to state, but it is typically between 3 and 5 years.

❓ How do the escheat laws apply to gift cards?
The escheat laws apply to gift cards in the same way that they apply to other types of property. If a gift card remains unredeemed for the dormancy period, the issuer must escheat the value of the card to the state.

We’ve heard escheatment coming up more frequently in company audits and diligence processes. It’s important to review your gift card programs and practices to make sure they comply with state escheat laws.

Tracking the activity on your gift cards is extremely important. Work with your accounting and legal teams to ensure that you escheat the value of any cards that remain unredeemed for the dormancy period.

How does your company handle unclaimed gift cards and navigate escheat laws? Share your tips below.

Retailers should assess gift card procedures including an annual review of reporting, sales tax, unclaimed property and more.

12/12/2023

Building a world-class digital finance function. (https://hubs.ly/Q02bXM6v0)

“The nature of the finance function is changing. Instead of reporting on the past, the finance function needs to look toward the future and be able to steer the organization through uncertainty and volatility. You can’t do that if you’re spending 80% of your time reporting, or even worse, doing manual transactions with a high quality-control need…It’s about using technology in its different forms to improve quality and reduce manual work. Today, that’s happening at a scale that allows us to fundamentally change the role of finance.” - Inside the Strategy Room, Podcast - McKinsey & Company.

There is an increasing number of CFOs who become CEOs, and the nexus between the CFO and the CIO is one of the most active, creative, and engaging areas in business today. We have not yet reached the full potential for digitizing the finance function. In reality, only about half of repetitive tasks are being automated.

This is a phase where there is a huge wave of investment going into digitizing the enterprise backbone. Companies should take advantage of this opportunity to fully rethink the role of finance.

What steps is your company currently taking to automate repetitive finance and accounting data processing work? Share in the comments! 👇

We look at how CFOs can use the ongoing digital transformation of the finance function to help organizations become more forward-looking and resilient.

12/07/2023

Holiday shopping in 2023: ‘It started early and will end late' (https://hubs.ly/Q02bY1N30)

The holiday shopping season is extended, with consumers shopping earlier and later to find the best deals. Consumers are spreading out their shopping, with some starting as early as October and others waiting until closer to Christmas. This is likely due to the fact that consumers are more price-conscious than ever before and are looking for ways to stretch their holiday budgets.

Retailers are facing increased pressure to offer competitive promotions and flexible payment options, such as BNPL. Consumers are more price-conscious than ever before and are looking for ways to save money. They are increasingly comfortable using BNPL services, which allow them to spread out the cost of purchases over time. As a result, retailers are feeling the pressure to offer competitive promotions and BNPL options in order to attract and retain customers.

Companies can be creative beyond just discounting for price-conscious consumers. We’ve seen a few of these examples with our merchants:

1️⃣ Gift with purchase: increase perceived value by adding a free gift with a purchase above a specific order amount.

(Blue Onion Resources: How to Record Discounts or Complimentary Products in the Books - https://hubs.ly/Q02bY3pX0)

2️⃣ BNPL integration: offer flexible payment options to ease financial strain.

3️⃣ Bonus on gift card purchases: buy a gift card for $100 and get an extra $25.

(Ecommerce Accounting Best Practices: Recording Gift Card Sales - https://hubs.ly/Q02bXZv00)

Marketing teams are always coming up with creative ways to incentivize customers to buy more - buy one get one free, cart-level discounts, discounts based on your order value, and gift with purchase are a few popular programs. What’s the best accounting practice in recording and reconciling these ...

12/05/2023

2023 Q4 Holiday Preview by Numerator (https://hubs.ly/Q02bY26w0)

Numerator, a market research company, recently conducted a survey of 4,500 consumers to uncover their holiday shopping plans and preferences for 2023. The survey findings shed light on consumer spending intentions, purchasing channels, and gift card trends.

⭐ Spending Outlook: The majority of consumers (73%) plan to maintain or increase their holiday spending this year, while 27% anticipate reducing their expenditures compared to last year.
⭐ Online Shopping Dominance: E-commerce remains the preferred shopping channel for holiday purchases, with 70% of respondents indicating they intend to make purchases online.
⭐ Gift Card Popularity: Gift cards continue to be a popular holiday gift choice, with 72% of respondents expressing their intention to purchase gift cards this season.

These findings suggest that despite economic uncertainties, consumers remain committed to celebrating the holidays and are willing to spend.

The rise of e-commerce and gift cards is transforming the retail landscape, demanding adaptability from accountants. Accountants must manage growing transaction volume and complexity across multiple payment methods. This requires robust accounting procedures, sophisticated tools, and gift card accounting expertise. By embracing emerging technologies and adopting innovative approaches, accountants can ensure their organizations remain agile in this dynamic environment.

💬 Chat with our accounting experts and learn how to automate your order-to-cash reconciliation and revenue recognition processes with Blue Onion - https://hubs.ly/Q02bXNm_0

11/16/2023

Lattes at your favorite coffee shop may be more expensive with prices having increased across the supply chain. Inflation has made all of the raw materials to make a latte more expensive, including the beans and the milk. Labor costs can also represent 30% of the revenue for a coffee shop, which is also a major factor in the higher prices. (https://hubs.ly/Q026GD-R0)

This article combines our love of fancy coffee and accounting. It essentially breaks down the cost of goods sold for a latte. Are you experiencing higher costs for everyday items you regularly purchase? Comment below! 👇

Your expensive coffee habit is indeed getting even more expensive.

11/15/2023

Adobe expects U.S. online holiday sales to hit $222 billion, representing 4.8% growth year-over-year. Deeper discounts are expected this year as merchants contend with an unpredictable economic environment. Discounts are anticipated to reach record highs at 30% for electronics, 25% for apparel, 24% for sporting goods, and 19% for furniture/bedding with the deepest discounts during Cyber Week. Also expect to see record highs for Buy-Now-Pay-Later (BNPL), driving $17 billion in online spending, up 17% year-over-year. (https://hubs.ly/Q026wPDN0)

Retailers are expected to offer deeper holiday discounts this year, given the potential economic headwinds facing consumers and the fact that most supply chains are now running smoothly.

This is an opportunity for merchants to capture some of that spending earlier, as holiday shopping events like Amazon Prime Day are moving into October. This can be beneficial for merchants from both a cash flow and market share perspective, especially if they plan to offer those discounts anyway.

Have you seen a shift in timing or deeper discounts for this year's holiday sales season? Comment below! 👇

· Mobile shopping set to overtake desktop for the first time, as consumers get increasingly comfortable transacting on smaller screens · Discounts expected to hit record highs this season, peaking at 35% off listed price for toys, 30% for electronics and 25% for apparel · Buy Now, Pay Later usage...

11/14/2023

KPMG will invest $2 billion over the next 5 years into AI initiatives through their new AI and digital innovation group. As some predict that AI could result in net job loss – where the new jobs created in response to new technology will not outpace the number of jobs lost – the new Head of AI at KPMG believes that they’ll need more people to interact with AI not less. (https://hubs.ly/Q026wNVW0)

“By handing over some of the heavy lifting to AI, Chase said he expects more employees will have time for analysis and to work with others to make sure those insights are shared and understood.”

When Excel was first launched, it would have been hard to imagine the wide range of jobs that would be created using this new technology. We do see more companies being open to using new technology to make existing teams more productive and as Chase mentions to focus more on analysis and insights.

There can be the false impression that it is a choice between technology and people. In reality, for many teams we speak with, there may not be an option to hire more people due to a lack of qualified candidates, budgetary constraints or willingness to invest into the function.

How do you see AI changing the way we work and collaborate in the future? Share your thoughts below. 👇

KPMG's Steve Chase expects artificial intelligence will lead to more jobs at the accounting and consulting giant.

11/09/2023

TikTok and Amazon are both looking to capitalize on the growing trend of social commerce. TikTok wants to make it easier for users to shop directly on the app, while Amazon is adding social features to its website to make it more engaging for younger shoppers. Social commerce is expected to grow into a $100 billion market by 2025, up from $67 billion this year. (https://hubs.ly/Q026wMnL0)

We’ve seen many brands connect their Shopify accounts to Meta in order to enable social commerce. It will be interesting to see how popular TikTok becomes as a social commerce platform, and whether it could even become the only channel for some brands, similar to how some brands now only sell on Amazon and build successful businesses.

However, investing in a new channel operationally requires a significant commitment, so brands need to be confident that their customers will buy from them on the new channel, that it will open up new customer acquisition opportunities, or that the cost of getting started is relatively low.

Are you considering or have you started using TikTok as another channel? Share your thoughts with us.

In the emerging business of ‘social shopping,’ TikTok dominates the social and is spending big to improve the selling. Amazon dominates selling, and is working on the social.