Bigger, Better, Faster, Stronger: Just another day in the financial close

In the world of the corporate close, there have been many changes in accounting pronouncements, tax laws, and local regulations, but one thing always remains the same… the need to get it all done faster.  Having architected consolidation systems and time saving solutions at a variety of Fortune 500, we have narrowed it down to 5 areas that you should be focusing on, if you aren’t already, to save you and your team time and get everyone back to working a 9 to 5.

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A spreadsheet is great, but there’s a time and a place… 

  • It’s easy, but is it efficient?

    • How many hours has “fat fingering”, version control, or formula errors cost you and your team?

  • Is my system of record truly complete if I have offline data?

    • Any processing of post consolidated data should be happening in the system of record, not offline.

    • If you can calculate something in a spreadsheet using data from the system, then you can calculate it in the system.

  • A spreadsheet should be used as an ad hoc analysis tool, not a calculation engine.

So, what are these 5 focus areas?

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1. Data Integration

  • You should be getting emails

    • Let the load process talk to you. Whether the load succeeds or fails, emails can provide the necessary details with logs and reports for you and your team to review.

  • Data loads should be relatively fast

    • Having loaded millions of records in less than 20 minutes, anything over that may be indicative of a problem.

    • Streamline your mappings by taking advantage of load rules where appropriate.

    • Don’t use files if you don’t have to. Direct general ledger and warehouse integration is easier than it may seem.

  • Automate downstream data

    • If Actual data is needed outside of consolidations, have that data push out in parallel; try not to reload the same data set multiple times.

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2. Cash Flow - The Great White Whale

  • Can’t fully automate, so what is our next best option?

    • Keep it simple. The change in your balance sheet accounts outside of cash equals your change in cash; focus on that.

    • Default your balance sheet movement by account to a specific cash flow category; subsequently use web forms to re-class items to their correct movement categories.

  • Use your metadata more than your rules

    • You shouldn’t be updating your rules every time there is a new cash category.

    • Let the application logic use your metadata setup to remain flexible and dynamic.

  • FX

    • Let the system use your already translated Actual data to keep Beginning and Ending Balances intact, including any historical overrides.

    • Allow the activity to translate at an average rate.

    • The difference is in these translation methods is FX. Sounds simple, because it should be.

3. FX

  • Do you ever feel like a currency trader?

    • Let the system perform translations by simply adding the appropriate FX rates.

    • Don’t waste time trying to triangulate rates, let the application do it for you.

  • Year over Year versus Current Year at Prior Year Rates versus and on and on. . .

    • Use your already translated Actuals and re-translate it at different rates. Leverage your application to perform analysis on the same data in various ways.

4. Account Reconciliations and Supplemental Data

  • Centralize your supporting spreadsheet documents

    • Hundreds, sometimes thousands of files, all with multiple worksheets, found across various network drives, with different levels of access and complexity…sound familiar?

    • Functionality may not be all that different in the add-on tools, but it sure is nice having it all in one central hub where you can filter, analyze, dashboard, search, etc.

  • Workflow and responsibility

    • Does adding a name in a spreadsheet cell really indicate that something was reviewed? 

    • Use electronic workflow to ensure that the appropriate level of review has occurred and is recorded for a full audit trail.

    • Use system reports and dashboards to help identify bottlenecks and see who may be behind on their tasks.

  • Notification

    • When something is completed in a spreadsheet, how do you know?

    • Rely on system emails to let you and your team know when something needs attention.

5. Financial Close Calendars and Tasks

  • Centralize your various calendars and tasks

    • Much like the above, having everything in one place has major benefits.

    • Different divisions, departments, regions, countries, regulations, changing personnel, acquisitions…the list goes on and on.

  • Allow for any system-related financial close tasks to occur automatically

    • Open or close periods, run data loads, lock or unlock data, post journals, take backups, etc.

  • Understanding your Financial Close

    • Dashboarding views that show where each department is in the current close.

    • Review past closes to identify bottlenecks and adjust broken processes.

  • Dashboards, Dashboards, Dashboards

    • Get a high-level overview of your close with your own dashboard(s) in seconds.

    • Pick and define a view that works for you. Below are examples of portlet views, but Calendar and Gantt charts are also available.

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Embrace the close, rather than fear it, by taking these 5 focus areas and defining what they mean to you and your organization. Don’t go at this alone! Contact us to make both your corporate close and lives easier. To infinity and beyond!