Moderated by Emily, Digital Transformation Consultant at Hyperbots
Emily: Hi, everyone. This is Emily, and I’m a digital transformation consultant with Hyperbots. I’m really pleased to have Dave Sackett on the call with me, who is the VP of finance at Persimmon Technologies. So thank you so much for joining us today, Dave.
Dave Sackett: Yeah. Thanks. Emily.
Emily: So, Dave, the topic we’ll be discussing is Deltech CostPoint, GL coding, compliance, and the role of AI tools. So to kick things off. The 1st thing that I’d want to ask you is, if can you explain the GL coding scheme used in Deltech cost point, and how exactly it is structured to support businesses and high compliance industries. Let’s say, the government contracting, aerospace, defense, and nonprofits.
Dave Sackett: Sure. Yeah. The GL coding scheme and Delta cost point. It’s structured to support complex accounting through multiple segments, including you’ve got account organization project costs cost pool cost elements. For example, the account segment can capture the nature of the transaction, whether it’s an expense, an asset, or revenue. You know where it is on the GL, and there’s a project that can help track your revenue spending and your costing, which is very critical in government reporting where a lot of those contracts are cost-plus. So you need to have good records for auditing. You should be able to calculate indirect rates. you know, needed for government contract requirements like Far and DCAa guidelines.
Emily: Understood. So, Dave, what are some common errors or mistakes that organizations make when applying the GL coding scheme and cost point? And what impact? Can these mistakes really have happened?
Dave Sackett: Yeah, there are common errors, including incorrect segment coding, trying to get too detailed in your GL misclassifying transactions, and the wrong projects. Wrong organizations have different people. Interpret your accounts in a different way, so that you’ve got a mix of where your costs really land. You kind of want to all capture them in the same spot. you know, tracking labor expenses, you know. Maybe it’s coded against direct costs instead of indirect. So basically, you know, really locking down your system so that only direct can add to direct labor. Only indirect can add to indirect labor. So you can put controls in to make sure that your data is consistent with data entry, and you definitely don’t want to clutter the chart of accounts with too much granularity that will complicate financial reporting, and be more open to these kinds of mistakes.
Emily: Understood. Also, Dave, how do cost points, and coding schemes specifically benefit organizations operating in the different sectors that I just mentioned, like government aerospace defense and nonprofit sectors, If you can provide some examples that would be great.
Dave Sackett: Yeah, I’ll take defense as an example. cost points, coding scheme. It’s designed to handle detailed project accounting and cost allocations that are required. So, for instance, cost Point can help track down to the project level and manage multiple cost pools for calculating indirect rates. It can support rigorous compliance requirements and segregate direct and indirect costs. It helps with grant-based funding by tracking costs against restricted funds and producing reports for regulatory agencies.
Emily: Understood. Also, Dave, what features in cost point, help organizations achieve higher compliance, especially, you know, regarding regulatory standards like Far or DCAa that you just mentioned?
Dave Sackett: Okay. One example is automated compliance checks which validate, cost allocations and can ensure adherence to government regulations. There are audit trails and documentation which is another critical feature that allows transactions to be traced back to their source documents which are critical for the audits that are going to be required. Also, time and expense tracking. Having it all in cost. Point makes you know you’re not using multiple systems. You’re doing it all in one system, and you can get accurate labor costing which is required for the Service Contract Act. Sca and Cost Point also provide indirect rate management to calculate and manage indirect costs in line with Far and DCAa standards which is vital for government contractors, especially defense contractors.
Emily: Got it. so, Dave, can you describe some specific compliance? Benefits of using cost points for an organization working? Let’s say, Federal contracts.
Dave Sackett: Sure. Yeah, for an organization working on Federal contracts. Cost points, compliance, and features ensure adherence to strict government regulations. So one example is automated. Compliance checks that I talked about it can flag improper, cost allocations before they become an issue in an audit. It can track the segregation of duties and have evidence that prevents a single user from controlling multiple transaction phases. minimizing audit fraud and risk that could be picked up in an audit additionally, cost points, and capabilities to generate required reports such as incurred cost submissions, help demonstrate compliance with Far and DCAa requirements, reducing the risk of penalties and disallowed costs.
Emily: Understood. How can external AI tools enhance the integrity and functionality of the GL coding scheme and cost point?
Dave Sackett: Yeah. Great question external AI tools provide several enhancements such as data, validation and error, detection and to automate and review data entries and flag inconsistencies or errors. In real time these create anomalies that AI can set aside and through predictive analytics can help identify these unusual transactions from typical patterns which is crucial for compliance. And also, AI, okay, yeah, go ahead. You got it.
Emily: So diving deeper into AI. Dave, can you give examples of how AI tools have been effectively used to maintain the integrity of cost points and charts of accounts?
Dave Sackett: Yes, AI. Tools have been used to automate reconciliations between different account segments, comparing entities with projects and organization codes to identify mismatches or potential errors. It can flag the users for inconsistencies in the data. and they also support continuous learning by adapting to new compliance rules ensuring that cost points and charts of accounts remain up to date with the latest standards. So, for example, AI tools can detect, if certain cost categories are consistently misclassified and prompt a review, to prevent a repeated error. So, for example. if an AI system is doing something and it’s detected as an anomaly, and then it knows well it went from this account and got reclassed over to that account that AI Bot can learn and be taught to say, Okay, yeah. The reason why it’s being changed is for this. So when you see that now do this, so it’s very trainable in terms of making sure that not only does it alert you to problems, but it can then help prevent problems in the future.
Emily: Got it. And just to summarize the discussion that we are having, Dave, what future opportunities do you see for the integration of AI tools with cost points to further enhance compliance and financial accuracy?
Dave Sackett: Yeah, this is the part I like. The best future opportunities include deeper integration of machine learning algorithms or rules to predict compliance risks based on historical data patterns and to suggest corrective actions proactively. And you’ve got forecasting that AI will be able to do. And AI can facilitate real-time audits by continuously monitoring transactions against regulatory requirements, reducing the need for manual audits. So as you’re doing transactions, AI can almost be that auditor for you saying, hey, yeah, everything’s in compliance. Everything’s in compliance. Wait a second. This one looks odd and alert, the user that they could be out of compliance. So it’s having that assistance, and especially where you’ve got AI natural language processing, you’ll have almost like a chat Bot helping you as an assistant in the future to help translate complex regulations which you can turn into action directly within cost point, ensuring that all financial operations align with compliance standards.
Emily: That’s amazing. Thank you so much, Dave, for sharing your insights on Delta cost points, GL coding, compliance, capabilities, and the role of AI tools and enhancing these processes. Your expertise provides valuable guidance for organizations aiming to optimize their financial operations, while you know, maintaining strict regulatory compliance. So thank you so much.
Dave Sackett: Yeah, thank you. Emily.
