Closing the gaps is one of the greatest challenges in financial close. These gaps are often filled with spreadsheets, which themselves demand meticulous management to avoid duplication or inaccuracy. There comes a time when every finance leader, frustrated by the all-consuming nature of financial consolidation, realises there must be a better way. This can be felt most deeply by a business in the process of, or having been through, a period of growth.
The gaps that finance teams expend so much effort to close, are usually the result of disparate process management systems. Every business must respond to evolving methods and changing industry demands. Software packages are added over time, as new processes are introduced.
While additional functionality is a boon for the team making use of a new software package, it adds complexity to the financial month end close process. Consequently, more time is dedicated to extracting data from different systems, to populate within the core financial system. Manual financial close processes must be repeated time and again. For many finance leaders, this is daily.
Dreaming of faster close
Faster close means more time to spend extracting insights and reviewing strategy. Nevertheless, the finance leader is responsible for delivering an accurate picture of performance. The route to achieving this is wrought with challenges:
- Resource intensive
- Data inaccuracy
- Progress tracking.
These are never more prevalent than for scaling organisations. Many will not have sufficiently robust processes in place to deal with higher transaction volumes and any related disputes. When orders are coming in thick and fast, the system simply cannot handle the load.
A prime example is the retail industry. Here, the ecommerce boom has wreaked havoc for businesses with a restricted transaction volume. The financial management systems many businesses start out with are designed for a maximum of 1.5 million transactions. A ceiling which can become severely limiting.
Quick-fix add-ons are likely to get things moving again. But what impact does a sticking plaster have on financial close and consolidation? Another set of siloed data to factor in, with the probability of inaccuracies sneaking in becoming greater still.
How do finance leaders achieve the dream of faster financial close? How can financial close and consolidation – so deeply entrenched in manual processes – be reimagined?
Why do I keep hearing about integration?
Integration is how a financial leaders dream becomes a reality. Essentially, this is a single, fully integrated system with finance at the core. That doesn’t mean throwing out all the add-on systems essential to your industry – most add-on software packages can be integrated.
Third-party logistics software, for instance, is absolutely essential to many businesses. With integration, data from every order dispatch is collated in one system alongside finance. This is real-time data too. No matter what time of day the finance team might be working, with integration, they can be sure data is up-to-the-minute.
Integration facilitates a high standard of reporting both internally and externally. Finance teams can meet tight deadlines with improved integrity and transparency. Role-specific dashboards – designed to monitor performance and financial health – provide top-level oversight. This allows finance leaders to track financial close progress with great efficiency.
Key benefits of integrated financial management:
Integration eradicates siloed data, and with it, the need for manual intervention. The probability of inaccuracies in end of month financial reports reduces to zero. A single source of authoritative data across the entire business ensures data integrity and consistency. The dream of faster financial close is within reach.
Time to put your feet up
That’s unlikely. Global supply chains, shifting regulation, and multiple sales channels soon overwhelm a business not able to make fast and informed decisions. However, with a robust financial month end close process in place and the right tool for the job, time and resources are significantly freed up. Teams across a business have more time to nurture business growth and continuous improvement – both no longer a ‘nice to have’.
When financial close is fast and error-free, what will you dedicate those extra hours to?