But, businesses can rely too heavily upon spreadsheets, so as to lose sight of the original purpose and best use of this tool. Instead they are using it to manage – in some cases – multi-billion dollar balance sheets, and subsequently risk making decisions or reporting figures based on manually gathered, erroneous data. The challenge is, how do you convince your CFO that changes need to be made?
As with many things, the first goal is to make the company realise there is an issue that needs addressing. One of our customers achieved this in a remarkably simple way. They went to their CFO and commented “We are currently managing a $9 billion balance sheet in Excel”. This one statement got the board’s attention and opened the door to further discussions.
You can then back this up by focusing on what is strategically important and fit arguments around this. Just a few of many advantages of moving away from spreadsheets to an automated software solution include:
- Increased productivity with fewer resources: Automating balance sheet reconciliation and verification enables you to flatten the workload, eliminating the high peaks in activity, so that the work can be spread out appropriately across the close. Work is focussed on exceptions and some manual tasks are eliminated entirely.
- Reduced risks through complete accuracy in the data: By eliminating the “space” between technology silos, disparate teams, and manual spreadsheets/emails/etc, you reduce risk of errors and enable greater collaboration and efficiency.
- A stronger control framework: Workflows, consoles and audit trails provide a risk based framework that ensures all controls are properly identified, scoped, scheduled, and performed. Additionally, the ability to quickly retrieve and reconstruct an accounting period helps the team breathe easier when auditors ask for files and statements.
A great example of all of these gains being realised is the case of a global communications technology provider. They had focused originally on getting their time to close right with a sophisticated use of spreadsheets. They thought they’d closed the books, but in fact they hadn’t because 30 days later they would find issues. They realised they lacked visibility into the process and controls.
By automating the process in a purpose-built application platform, they gained insight into exactly where and why the misstatements were happening. By correcting the regional issues and strengthening the control framework, they achieved the same workload with fewer resources, eliminated the risk of restatements and delivered a true reflection of their time to close.
As we have commented in a previous blog, what this really means is that if you take care of the quality of the close, the time to close takes care of itself.