By Shak Akhtar, SVP Finance Automation/Customer Experience Officer, Redwood Software
Even if your finance department uses some form of automation, it’s likely that the financial period-end close will continue to weigh heavily on your accounting staff.
The financial period-end close is critical to trust, financial visibility and regulatory compliance. But for a large organization, a typical global close can involve more than 100 companies that must be closed before group consolidation can take place, each with more than 500 processes, along with many more sub-processes.
With so much activity taking place within the last few days of each month, it’s no surprise that 97% of CFOs surveyed by FSN Research said their biggest concern is failure to meet reporting deadlines.
One problem: the financial close still requires a lot of human effort. As much as 60% of the activities are done manually on spreadsheets, while much of the work is performed outside ERP systems, with scores of handwritten notes, ad hoc reports and other information to tie together. This approach is inexact, time-consuming and risky.
But automation has the potential to make the financial close a much less manual and complex affair – and even a non-event in some cases.
If done correctly, true finance automation should take care of the control and production aspects of the close, so your finance team can produce an accurate, optimized set of financial statements that clearly depict the health and stability of the company.
This is fundamental in enabling the finance department to act as a key strategic player, delivering the information needed to minimize compliance risks, analyze opportunities, drive efficiency and provide quality insight for better informed decision-making.
But to get to this point, you need to understand how reliable, efficient and compliant your current financial close process is. You need good visibility of the process and to make the best use of technology to improve it.