Around the world there seems to be one business mantra: Do more with less. Large, multi-national organizations are looking to achieve Silicon Valley start-up agility. Nowhere else is this felt more intensely than in the Finance department. Data and insights are needed now. Not tomorrow, and definitely not next week.
Finance execs are under pressure from boards, local authorities and auditors to improve the timeliness, visibility and efficiency of their reports. They are expected to generate consolidating accurate insights from across multiple borders and operational boundaries– despite currency fluxes, and other economic uncertainties.
The F&A department has been tasked with the challenge to be more nimble, especially when it comes to reporting. This means more transparency into trends and revenue, and predictive “what-if” modeling to be able to prevent risk accurately and assess future budget needs. All with full confidence in the outputs.
Yet over the years, confidence in the accuracy and compliance of financial reporting has plummeted.
In the face of an ever-increasing regulatory scrutiny and a more complex business environment, the challenge of “thinking and acting like a start-up” while producing precise, real-time reports can be overwhelming.
Pivot on a Dime
The problem lies in not only legacy systems, but in legacy processes that have been in place for five, ten, twenty years or more.
While F&A departments have been steadily marching toward automation, the Record-to-Report function involves a vast number of sequential manual processes—from pulling financial data from disparate systems to formulating, validating, handling exceptions, and finally documenting and reporting. All of which take time and inhibit companies from attaining that lightness and speed they are looking for in the financial close process.
According to a recent Hackett report, “A total of 56 percent of all companies still use spreadsheets and customized applications for planning and forecasting, and analysts spend more than half of their time compiling data, leaving less time for analysis and business advice.”
As a result of a lack of modernization, the R2R cycle tends to be more reactive than proactive.
Is Automation the Solution?
Yes and no. Yes, organizations need to embrace tools that allow real-time collaboration and visibility as well as automation to speed up the close cycle. No, because automation is only one factor in a smoother, more reliable close. A smarter, more productive financial close also relies on re-envisioning processes altogether to try to streamline and eliminate as many manual bottlenecks caused by exceptions as possible.
Companies must also elevate their people, removing as many transactional tasks as possible, so analysts and accounting professionals can focus on higher value work that provides the data and information needed to remain competitive. They also need help during peak cycle times, a known time of stressful intensity and wear on in-house employees.
Partnering with a business process transformation company can be the lever companies are looking for to gain control over their processes and glean better insights from their data.
If you’re looking to streamline your FP&A processes and extract meaningful insights from your data, we can help. Gain the competitive advantage; contact us today for an assessment of your current practices.