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ERPsWhen we initially speak to new companies we commonly hear “Why would I need software to manage my close when it’s currently managed in my ERP?”

It is true that ERP solutions go some way to help with the various individual close processes, however, it’s also true that companies such as AstraZeneca, ABB, Siemens, Microsoft, etc. also have ERPs but still wanted to improve their automation through the implementation of made for purpose R2R software.

Why? Because they weren’t happy with their current technology. They still struggled with all of the white space outside the ERP and were heavily reliant on spreadsheets and manual processes to manage their end to end Record to Report (R2R) processes and close their books. They all wanted to reduce the complexity of the close by automating their processes and close more quickly, for less money and with fewer resources. 

Different companies, however, aren’t starting from the same place and we see a number of different landscapes when it comes to businesses’ ERP environments, including:

  • Multiple different ERPs: Through acquisitions and legacy systems many companies have more than one type of ERP, whether these be SAP, Oracle, JD Edwards, or any other. The challenge comes at month end when companies try to pull together all the different close tasks and controls from the different systems, which all manage this information slightly differently. Historically, this means pulling it outside the ERP and working on it manually, often through the use of our best friend, the spreadsheet
  • Multiple Instances of a single ERP: Even when companies have a single ERP they will often have multiple instances which aren’t necessarily talking to each other. Again, different sections of the business will have different standards leading to inefficiencies, a lack of visibility, poor controls, and increased costs
  • A single instance of a single ERP: Even at ERP nirvana, the single instance of a single ERP, improvements can still be made. While all the information might now be in one place, the tools to effectively manage and coordinate the various activities, tasks and controls between the relevant individuals and teams are often missing, again leading to data having to be manually manipulated outside of the ERP itself and shared around the business in offline files

So, what can be done to solve these issues?

The analysts recommend a fully integrated, solution that removes all these white spaces and offers a single view of your close. One that can integrate not only across your ERP landscape for consistent data management, but also across your whole close process, to offer a single view across the business, wherever and whenever.

As Gartner state “When considering the automation and unification of critical financial processes, such as account reconciliations, compliance and Financial Close, the whole is greater than the sum of its parts. These activities are highly dependent on each other and, when unified, create new insights and return on investment (ROI) savings.”

For more information and to see how you can start on this journey, please feel free to download our accompanying eBook which describes the “how” of R2R transformation: Enabling R2R Transformation Through Technology.

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Think-Youve-AutomatedThere is consistency among market leading experts and finance functions that the key driver for financial transformation improvements is technology. As PWC so neatly put it “Improving finance technology is the #1 method that finance professionals identify for making finance processes more effective.”

Bearing this in mind, it would seem to be a fair assumption that most organisations have already got to grips with their systems and implemented the required technology to be as effective as possible. However, Ventana Research’s recent research seems to state otherwise:

“Only half of participating organizations have automated a significant percentage of their finance processes. In particular, just 11 percent have nearly or fully automated their financial close, while almost half (48%) apply some automation and 36 percent little or none.”

If we delve deeper the same is also true to individual processes that seem ripe for automation. For example, Ventana go on to say “Another example is the automation of reconciliation, which is an essential element of the close process. It’s a repetitive task that lends itself to automation, and affordable software for managing the task is mature. Yet just 37 percent of companies have applied automation to their reconciliation process”

So, companies can look at their overall R2R automation or each individual process. To help identify your own, it’s worth performing a maturity analysis on current performance, be they ad hoc, reactive or world class.

  • Ad Hoc: At this level processes lack any automation and companies will experience high costs and a time consuming, labour-intensive manual spreadsheet approach. There is also little integration across the R2R process, leading to a lot of “white spaces”
  • Reactive: At this level companies may have individual processes automated or partly automated. For example, basic reconciliation automation may be in place but without the advance matching with dynamic rules
  • World Class: At this level companies have a single system, often cloud based, which is fully integrated with the companies ERP. This enables a single global dashboard of status and activity to provide the office of the CFO full visibility or areas of risk

Remember, always think big, even if you have to start small and make the most of your vendor’s experience, they will have implemented hundreds of these solutions and that experience is critical for a success project. For more information about automating your R2R processes, click here for a recorded webinar on the subject or click here for an Insight White Paper.

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FinancialDirectorFinancial Director has written an interesting piece about PwC’s annual benchmarking report and highlight how the finance function is improving efficiencies and reducing costs through automating processes. As they state:

“PwC’s annual finance function benchmark report found that the best performing finance functions cost 40% less than their peers and have ditched the traditional focus on book-keeping and information gathering in favour of greater automation, shared services and more efficient use of capacity.”

On top of this, automation is allowing them to focus on the generation of actionable intelligence to add value to the business:

“The best finance professionals today are producing actionable information, not circulating numbers that are likely to be out of date as soon as they’re released.”

To see the full article, please click on the link below:

Financial Director News

The Record to Report or close process is no different in this regard, with technology delivering a number of key functions including Visibility, Collaboration, Insight, Automation and Integration. Click here to view a webinar on how automation can help deliver real value to your business.

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APQCAPQC is running a great series of blogs around the process improvement cycle that follows our experiences of the process management cycle.

Although “Improving finance technology is the #1 method that finance professionals identify for making finance processes more effective¹”, it isn’t a panacea and yet this is commonly the starting point for most companies.

While companies engaging in process transformation may be aware of the seven aspects of process management, what APQC calls the “Seven Tenets of Process Management”, the order in which these are executed on is key to the effectiveness of your transformation.

As APQC put it:

“Don’t buy into the hype that a tool can fix your unmanaged processes. Every dollar you spend upfront standardizing your processes and maturing your process management approaches will save you from the nightmare of having to “customize” your new system to accommodate process inconsistency.”

Now, it may seem odd for a software company to be saying that you should hold off buying software but the aim of a project is never to implement software, it’s to ensure success and value. That can only be achieved if the technology underpins the right processes, increasing efficiency, and reducing risks and costs. As the old adage goes, bad data in, bad data out.  To read the complete blog, go to:


Also, a recent SAP Insider article demonstrates what can happen when it all clicks into place and everyone works together with a single clear, communicated vision whether in the business, Shared Service Centre, BPO, or technology vendor.


¹ PWC, Unlocking Potential: Finance effectiveness benchmark study 2013

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Financial Shared Services CostsFinancial Shared Services initiatives have primarily been undertaken to deliver reduced costs and improved efficiency.  These goals are achieved relatively easily within the first few years of with results most immediately being felt through reducing labour costs and centralization.

When they are first established, standardization and centralization deliver up to 50% savings. During subsequent phases, technology automation and outsourcing cut costs further.  But if cost reduction is the only clearly defined goal, organizations will reach a point of diminishing returns.

As the shift to incremental savings begins to occur the business should, and will, look to the SSO for a different type of value, predominantly around how it can make their business better.  The challenge is to maintain efficiency while shifting the focus to increasing strategic effectiveness.  So what role can information technology play in rising to the challenge?

Take Record to Report improvements for instance, as the effort to close reduced, and quality improved, they were able to reassign their resources to view the data in more detail and spend their time proactively looking for improvements rather than reactively dealing with issues. Time was spent asking questions such as:

  • How can we use KPIs and analytics to improve performance?
  • What are the high risk accounts and how do we focus more effort on these?
  • How do we make the process more robust?
  • What can this tell us about new trends?

While reducing costs might be the ticket to entry, it is only the start of the process and, as is always the case, Financial Shared Services need to continuously improve their processes to demonstrate value to the business beyond simple cost reductions.

For more information about how you can start your R2R journey, please download our eBook:  Shared Services Insights: Improving Record to Report Performance In 2015.

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SpreadsheetsSpreadsheets have been the backbone of finance and accounting for decades, with companies relying on them for financial, analytical, and operational processes.

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.


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3StepsIn our last blog, ‘Should we all be thinking effort to close rather than time to close?’, we demonstrated how companies have been able to have the best of all worlds, providing their business with improved quality, reduced costs, and reduced time across their close process.

So, what can you do to reach this nirvana? While the analysts, such as Aberdeen, Hackett, Ventana and Deloitte, may vary in the number of steps, there are three consistent threads that they all agree on. These are: 

  1. Standardise your processes across your business: Take the opportunity to not only replicate what was being done before but establish best practice. Often this stage will include the development of a Shared Service Centre (SSC) or Business Process Outsourcing (BPO) company. If so, it is vital that the role of these are effectively defined and communicated.
  2. Automate wherever possible: This is across the entire Record to Report processes, including reconciliations, journal entries and close tasks. It is vitally important to ensure you have integration of systems across the whole process to reduce complexities, risks and costs.
  3. Optimise: Once general tasks have been automated, a proactive risk based approach can be implemented to further improve efficiencies. At Trintech we have helped customers to develop a risk rating as a means to drive reconciliation/review schedules, for example: A Medium rating might be given to a low risk account that has open items greater than a certain amount.

One of the main challenges is the order that these are undertaken. Some experts advise using technology to help companies standardise their processes, while others recommend standardising their processes and then automating. In reality, companies will often do a mixture of the two, standardising where possible and then implementing technology followed by further standardisation once everything can be seen.

The key is to talk through with partners and vendors and utilise their experience before and during implementation. They are the ones who have done it before and can lead you in terms of the questions you should be asking internally, and providing best practices from previous companies they have worked with.

For more information on how technology can enable Record to Report (R2R) transformation please click here to download our complimentary eBook.

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Companies pay specific attention to their time-to-close, and reducing this has been a key financial objective for years. However, is this the most useful indicator when looking at your close performance?

Effort to CloseSpeed vs Quality

The common adage in terms of speed, quality, and cost states that you can only pick two. One Trintech customer example that highlights this can be seen in the case of a global communications technology provider. Before implementing Trintech, they set time-to-close as a key metric and made great strides in reducing it. However, this had an unintended negative impact on their quality.

They found that 30 days after they’d closed the books, issues would arise around unsubstantiated figures and possible misstatements due to rushed work and a lack of visibility into the process and controls. However, I’m pleased to say that in terms of the close process there is another way.

The answer? What they did was deploy software that automated the process and provided insights into exactly where and why the misstatements were happening. By strengthening the control framework, they could drill down on any regional issues and ensure accurate data, while maintaining their time-to-close targets. What this really means is that by taking care of the Quality of the Close, the time-to-close took care of itself.

Quality vs Costs

Improving quality can also have a positive impact on the other variable: Cost. Recent studies from Hackett have shown that best in class companies are managing to have their cake and eat it too, reducing time and ensuring quality while reducing costs overall. Their research¹ shows that best in class performers have:

• A 40% reduction in the number of days required to close
• A 52% reduction in process costs as a percentage of revenue
• A 63% reduction in FTEs per billion dollars of revenue

While we would recommend that companies continue to review their time-to-close, we also believe that this should be as part of an overall improvement strategy and not a standalone metric. By doing this you really can buck the trend and deliver speed, quality and reduced costs across the close process.

For more information on how technology can enable Record to Report (R2R) transformation please click here to download our complimentary eBook.

¹ Leaders of Account-to-Report: Key Performance Levels and Methods

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In a recent SAP® Insider, Trintech EVP Robert Michlewicz discusses “Evolving for Efficiency: Financial Processes Gain Speed and Agility Through Cloud Deployment Options.” In the article, Michlewicz  explores issues faced by finance executives due to limited point solutions, globalization and rapidly changing regulatory requirements and the benefits of cloud-based solutions in resolving these issues. “On top of it all, with multiple lines of business in remote locations, executives on the move, and frequently changing regulatory requirements, companies need to consider solutions that can be flexible enough to change on the fly while also providing information to employees when and where they need it.”

Download the SAP Insider article "Evolving for Efficiency: Financial Processes Gain Speed and Agility Through Cloud Deployment Options"

Download the full SAP Insider article “Evolving for Efficiency: Financial Processes Gain Speed and Agility Through Cloud Deployment Options”

Michlewicz also discusses “The Importance of Integration” pointing out that system customizations combined with multiple instances of SAP can lead to inefficiencies and hinder senior leadership’s ability to guide their organization. “Even the most sophisticated technologies lose impact in the absence of smooth integration. If data isn’t being shared among systems properly, executives can’t make the vital business decisions that drive the company’s direction.”

He goes on to offer some examples of large organizations who have resolved these issues with Trintech solutions. One example was AstraZeneca (who recently won the Alsbridge Innovation Award for its balance sheet reconciliation transformation project). AstraZeneca used Cadency® for its global R2R processes, reducing costs and increasing compliance while fully integrating with its SAP® Systems. Another example is a large multinational organization who manages reconciliations across 20 different instances of SAP® using Trintech solutions.

Download the full SAP® Insider article to learn more.

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Record-to-ReportGartner recently published the latest IT Market Clock for Financial Management Applications 2014 and highlighted a new category of software entitled “Enhanced Finance Controls and Automation.” Briefly, they define this category as being focused on improving financial processes and controls across all aspects of finance. It includes financial close and disclosure management software, as well as automating and managing process controls and analytics for all finance processes, enabling finance to increase efficiency and effectiveness.

Not surprisingly, Trintech is noted as a vendor in this new category, since for more than 20 years we have provided software to 800+ companies to automate the processes that make up their record-to-report.

It is quite gratifying to be mentioned in the report, particularly since Trintech was the first vendor to announce and deliver a single solution that holistically addresses all of the processes that make up the record-to-report cycle. We do this with Cadency, our cloud-based R2R software solution. For those of you unfamiliar, the R2R cycle covers all aspects of the financial close process – including operational reconciliation, balance sheet reconciliation, journal entry, financial controls/compliance, close task management and workflow, as well as financial reporting and disclosures.

To be candid, we are STILL the only vendor to offer a single solution for the entire R2R process and not just a part of the process, which is the limitation of a point solution. Though you can definitely see point solution vendors scrambling with faux marketing messages trying to catch up to this all-important area of finance.

One of the reasons for this is that the operational and GL reconciliations market has become somewhat commoditized. Yes, each of us who offer solutions in the reconciliation space have certain features and functions that the others may or may not have. But that is no longer the end game. Rather, organizations have now begun to realize that point solutions for reconciliations do not scale globally, they create white space inefficiencies, and are very difficult to administer and integrate into their overall R2R process. This leads to rework, decreased visibility and added risk across the entire R2R cycle.

That is one of many the reasons that global organizations are choosing to partner with Trintech to manage the entire R2R process from a single source, and why we continue to grow 100% year over year.