It isn’t just us at Trintech who have been evangelising the importance of recording, reporting and continuously managing your Record to Report metrics this August. CFO.com have also got in on the act with their most recent Metric of the Month: Close-to-Disclose Cycle Time.
In their recent article, which can be seen in full by following the link at the end of this blog, they review APQC’s data which highlights how much further best performing companies are compared to their peers.
In a recent blog, “Should we all be thinking effort to close rather than time to close?“, we questioned the suitability of using time as a metric when it comes to assessing the overall performance of the close process. However, Mary Driscoll from APQC makes a valid argument as to why they feel time is important:
Why the need for speed? Many CFOs feel the need to be one of the first in his or her industry to report earnings each quarter. The notion is that this builds shareholder and analyst confidence. Meanwhile, business unit leaders are typically chomping at the bit to see the official quarter-end tallies for revenues and costs so they can, if need be, adjust growth assumptions, resource allocation formulas, forward forecasts, and hiring plans.
However, APQC found that companies aren’t only realising time savings, they are also seeing cost savings too:
The top performers among these 524 organizations get the job done for one quarter of the cost incurred by the bottom performers, the worst 25% of the group.
So, what’s to be done to achieve this? As Mary points out:
The best-performing companies take a continuous improvement approach, constantly benchmarking their close-to-disclose efficiency and speed. By continuously evaluating processes, timetables, policies, and systems and incorporating best practices, companies continuously improve speed and cost efficiency.
There’s no doubt that the time to close is a popular metric that companies have used for the past few years to improve their close cycle. While we would recommend people continue to gain the benefits that reduced time can deliver, we believe that greater gains can be made from looking at a number of different, interconnected metrics across the whole Record-To-Report process.
To read the CFO article in full, please click here. To download a white paper outline a number of R2R metrics across the close process, please click the banner below.
To learn about transforming your office of finance with RPA, download the complete CFO’s Guide to RPA.