Blog

So You Think You’ve Automated Your Close Process? Think Again…

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 organizations 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 below for an Insight White Paper.

 

Record to Report Automation