This article first appeared on the OneStream blog by Nicholas Cox
Anyone leading Finance in a complex organisation today is likely facing increasing pressure to focus their efforts on value creation rather than just routine accounting, control, and compliance. And as the requirement increases for accurate and timely data to inform key decision-making, the traditional month-end financial reporting cycle is clearly a material barrier to driving performance. According to Accounting Web in 2021, 30% of survey respondents reported taking as many as 16-19 working days to close the books. Many Finance teams are now moving backward as data volumes increase within their organisations. Without change, more organisations could find themselves missing reporting deadlines and suffering from late filing penalties.
Why are so many organisations struggling to report in a timely manner?
The reason is simple: they’re relying on fragmented silos of spreadsheets, legacy corporate performance management (CPM) software, data lakes, and BI tools for their reporting needs – forcing Finance teams to build disjointed processes around disparate technology tools. Many of these tools are not optimally implemented or organised. When every departmental and corporate application or model must be connected or integrated, it adds significant risks, costs, and complexities to already-taxed Finance teams.
Want proof? Just think about how much time you and your team spend manually copying and pasting information between fragmented sources and tools as opposed to analysing results and helping your business partners take action. Does this drawn-out process sound familiar?
The good news is that there is another option. Unifying these multiple processes and tools can provide more automation, remove the complexities of the past and meet the diverse requirements of even the most complex organisation, both today and well into the future.
A Unified CPM Solution
Having a unified CPM platform such as OneStream (see Figure 1) is now a prerequisite to streamlining year-end reporting and unleashing the value of Finance. And to make that possible, a platform that unifies key Finance processes and provides purpose-built functionality for financial consolidation, reporting, planning, forecasting, and analysis is necessary. A unified CPM platform integrates financial and operational data from multiple sources and provides a single version of the truth for actuals, budgets, plans, forecasts, and analytical data.
Along with using a unified CPM platform, here are 3 steps you can take to streamline your year-end financial reporting:
- Automate data load with built-in financial data quality management
- Remove bottlenecks in the key financial close processes
- Automate the production and distribution of financial reporting
1. Automate data loading with built-in financial data quality management
Collecting and integrating data from multiple GL/ERP systems into a financial consolidation system can be a laborious task. In many organisations, this data collection process is handled via flat files or spreadsheets being sent from remote locations to corporate accounting for loading into the consolidation system. This manual process lends itself to errors that often require multiple emails or phone calls to resolve when the incoming data is incomplete or doesn’t map to the corporate chart of accounts.
By creating a direct connection between the financial consolidation system and the GL/ERP data sources, the enterprise can automate and streamline the data collection process, with exceptions being flagged and addressed quickly.
The unified CPM platform should have financial data quality management (FDQM) at its core. This capability is critical for organisations to drive effective transformation across Finance and lines of business. A key requirement in FDQM is 100% visibility from reports to sources – all financial and operational data must be clearly visible and easily accessible. Key financial processes should be automated, and using a single interface means the enterprise can utilise its core financial and operational data with full integration to all ERPs and other systems.
2. Remove bottlenecks in the key financial close processes
To truly become a strategic business partner, the Finance function must dramatically reduce its transactional workload within financial close processes. Unleashing the true value of Finance requires minimising manual tasks to ensure efficiency in the following key processes (and others):
- Intercompany eliminations – When this critical task is done manually, it often adds extra days to the close process as corporate Finance staff spends too much time trying to reconcile intercompany balances and getting divisional and regional accountants to correct intercompany accounts. With a unified CPM platform, however, the responsibility for communicating and confirming intercompany charges and balances between divisions or regions can be pushed down to the operating levels, with intercompany eliminations being automated and only minor exceptions needing the attention of corporate Finance.
- Allocations – Performing cost allocations required during the close process can be tedious when using spreadsheets, given the iterative nature of the process. With a unified CPM platform, however, cost allocations can be automated and updated as the financial results are updated over the course of the financial close cycle.
- Account reconciliations – Finance teams in mid-sized to large enterprises can have hundreds to thousands of account reconciliations that must be performed before the financial results can be finalised at period-end, adding extra days to the close process. With a modern account reconciliations solution that integrates seamlessly with the financial consolidation software, however, the account reconciliations process can be more automated and significantly streamlined.
3. Automate the production and distribution of financial and operational reports
While collecting and consolidating results often consumes most of the monthly close process, generating reports for management and external stakeholders can also consume a lot of Finance time, especially when using spreadsheets. With a unified financial consolidation solution that includes integrated and Finance-friendly reporting tools, however, the production and distribution of management and financial reports can be largely automated. In return, delivery is accelerated, and more time is provided for Finance to perform value-added analysis.
Having a broad range of reporting and analytics capabilities helps reduce reliance on spreadsheets and fragmented reporting tools to increase the speed, scope, and accuracy of reporting across the organisation. It is important to unify Finance processes across the Office of the CFO while enabling the organisation with self-service, easy-to-use reporting solutions for a variety of stakeholder groups.
Streamlined Year-End Reporting Success
Organisations that replace spreadsheets, manual uploads, and automate key financial processes and reporting within OneStream’s unified, governed, and flexible CPM platform can achieve a streamlined year-end reporting process. These organisations can truly lead at speed by delivering the right information, in the right format, at the right time to drive performance and bring value.
If your Finance organisation is being hindered from unleashing its true value, maybe it’s time to evaluate your internal systems and processes and start identifying areas for improvement. To learn more, download our e-book on Reporting & Analytics today.