We’re entering a new era of finance transformation, and forward-thinking businesses have strategies that are focused on how to move faster, be more responsive, less manual, and more transparent.
But tackling strategy is often futile without reinventing the core first. Through orchestration, automation, and managing data integrity, organizations can reduce resource overhead and improve data quality and cycle times in the financial close.
Leading accounting and finance organizations are transitioning into a more analytical function and partnership role by building their business plan around three pillars:
- Close Process Transformation
- Process Automation Transformation
- Integrity and Risk Transformation
Executing each one of these pillars is vital to maximizing the reduction in transactional processing in accounting, which management consultancy Accenture predicts can be reduced by 40% — with the right combination of people, process, and technology.
When you take a look inside top performing organizations, it’s immediately evident that they do things differently ― and it’s time to take a page from their playbook
Close Process Transformation
Too often, the close process is run by gut, instinct, and collective knowledge, versus a defined, centralized, and orchestrated workflow and process. With so many people involved and mounds of spreadsheets constantly accumulating, roughly defined processes are often different, from geography to subsidiary.
Collaboration remains stubbornly stuck in email and conference calls, with limited visibility into the process.
When you take a look inside top performing organizations, it’s immediately evident that they do things differently ― and it’s time to take a page from their playbook.
The key to their success is clarity. Each stakeholder in their organization has a clear perspective of what must happen at each step, when it must happen, and what it depends on. They’ve created a clear set of roles and responsibilities and have management-level reports that give visibility into the global close calendar.
Milestone tasks are in place to guarantee the correct sequence, flow, and roll-up of related activities. Automatic notifications are set to warn stakeholders of pending tasks and to give management a heads-up of overdue tasks and bottlenecks. And a set of internal controls is established to reduce material risk while eliminating unnecessary controls that stand in the way of a fast close.
As a result, they can close and report, on average, twice as fast as their peer group.
Process Automation Transformation
It’s no secret that manual tasks drain accounting and finance efficiency, and those tasks continue to top most accounting surveys as the biggest challenge to achieving a lean close. The issue often causes associated frustrations among accountants ― frequently the most talented ones who aren’t using their skills appropriately, and are instead performing repetitive work.
Typically, accounting organizations have significant manual overhead in several areas. This includes the operational areas of accounting, such as billing and collections and accounts receivable, and within the close and general accounting areas, such as journal entries, account and transactional reconciliations, and intercompany transactions.
Best-in-class organizations are, however, substantially leaner than their peers and able to reallocate their costs towards strategy. A key enabler for them is leveraging process automation at various levels within the accounting team.
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