According to a study by The Hackett Group, manual activities are, somewhat predictably, the largest bottleneck and area of concern in the close process. What might be more surprising is that, for top performing companies, the management of intercompany reconciliations is just as big a concern.
As you can see to the right, both top performing companies and their peers stated their main concern as being around manual postings. While the number of transactions and controls being manually managed for top-performing companies is less than their peers, due to more advanced process standardization and automation, they still recognize the inherent risks associated with manual activities and have a continuous focus on automation to reduce that risk.
As mentioned however, the other largest area of concern for these top performers as we approach 2018 is around intercompany reconciliations. We often see organizations struggling with intercompany reconciliations due to rapid growth through acquisitions, a lack of standardized processes, high volumes of manual transactions, and most commonly, intercompany not being viewed as a critical finance activity.
The reason why so many more top performing companies are concerned with Intercompany bottlenecks is that these organizations have already taken the initial step in automating and standardizing their balance sheet reconciliations and now have more time to focus on how to drive efficiencies and agility across their intercompany process. They are also more aware that there is a solution out there that can solve their intercompany bottleneck, rather than just accepting that this is just the way this process runs.
Written by: Kelli Shoevlin