The role of the CFO has undergone a profound transformation in recent years. Traditionally, their focus was on accounting, financial reporting and compliance. Today CFOs play a more strategic role where they drive the direction and success of their organizations using their knowledge and understanding of the financial position of the company. However, these legacy activities are still critical to the close, so they are now just having to do more with less. Given this reality, organizations are looking for ways to automate mundane activities in their close process to free up resources for more cognitive activities such as analysis and decision making.
Trintech is helping many firms streamline their period-end close process by using innovative, disruptive technologies to automate close tasks within customer’s ERP(s) such as SAP® ECC, S/4HANA, Oracle EBS, etc. As an example, executing the “Depreciation Posting Run” is a part of the period-end closing process that is traditionally performed by the finance and accounting (F&A) team. It is a tedious process that needs to be performed diligently for each entity within the organization and can take hundreds of hours of manual effort every year.
The below diagram depicts the typical manual steps involved in the depreciation posting process:
- Use in-house tools such as email and spreadsheets to manage workflow for close tasks and manually keep track of the execution status
- Log into the ERP instance and execute periodic asset postings
- Execute depreciation run in test mode
- Extract depreciation simulation reports, asset change masters and analyze logs for any errors and then perform variance analysis by comparing the current data to last period data
- Execute depreciation run in production mode and check logs to confirm it ran successfully
- Update the status of the task
As you can see, the manual approach is tedious and not only increases the time and cost of completing the depreciation posting but also significantly increases the risk of errors potentially requiring rework. Trintech can help streamline and automate this process, reducing cost and risk simultaneously.
Now, you may wonder why you should invest in another solution when you have already made investments in an expensive ERP system, other 3rd-party RPA tools, and home-grown custom solutions within your ERP or have plans to move to S/4HANA. ERP Systems such as SAP® ECC6, S/4HANA, Oracle EBS etc. do a great job at what they were created for but do not provide the automation or controls needed for an effective and efficient period end-close process. You can solve some of these challenges by developing custom automation and integration using 3rd-party RPA tools, but most customizations are prohibitively expensive and do not provide future-proofing. For example, as firms migrate to/from SAP® ECC6 or S/4HANA, the automation components will have to be reconfigured from the ground up. Usually, these integrations are performed using a presentation layer which is extremely fragile and error-prone. For instance, simple screen resolution changes or UI updates can break the automation easily. What your organization needs is to take a deeper look into a comprehensive System of Accounting Intelligence™ (SOAI) platform that includes:
- System of Integration – Leverage purpose-built ERP and JE connectors for major ERPs and APIs
- System of Controls – Automate key Record to Report processes including Reconciliation (Balance Sheet, Intercompany and High-Volume), Journal Entry, Close and Compliance processes that are designed to provide seamless workflow from one process to another
- System of Automation – Apply innovative Risk Intelligent RPA™, such as Dynamic Account Maintenance, Dynamic Approval Routing, etc., to your processes, as well as, a suite of ERP Bots which provide native automation within leading ERPs to provide journal entry automation and close task automation
- Financial Controls AI™ (FC-AI) – Use machine learning algorithms and artificial intelligence to examine trends in your data over time, identify abnormalities, and automate workflows based on the associated risk
The breadth and depth of offerings that Cadency provides are simply unmatched in the Record to Report space. With an extensive roadmap that is continually updated based on market feedback and internal R&D, and differentiated offerings such as a SAP-Certified Connector and ERP Bots, FC-AI (AI Risk Rating for JE), etc. our customers can rest assured that they can grow with Trintech as their business needs evolve over the years.
We understand that the CFO organization is focused on improving and optimizing the Record to Report process to produce accurate financial reporting while reducing risk and cost. CIO organizations care about aligning 3rd-party software with their core IT strategies such as standardization of tools and processes, reducing customization effort and support, and ensuring compliance with all security requirements. Cadency is designed with both the CFO and CIO in mind and its core System of Controls provides peace of mind to CFOs while its System of Integration and Automation offering directly aligns with CIO’s priorities. It provides standard interfaces with end to end data and transport security and is completely maintained and supported by Trintech. This not only eliminates the expensive customization, maintenance and support efforts for our customers but also future proofs them for new ERP upgrades. Further, as more and more companies increase their remote working, the Wall Street Journal discusses how companies who rely heavily on cloud-based technologies to automate accruals, adjustments and internal transactions may be in for a smoother close than those that use on-premise technology on virtual private networks or enter data into spreadsheets manually.
In the “Depreciation Posting Run” example, Cadency provides a seamless and completely touchless process by leveraging Cadency Close Process (System of Controls), Close Action Plan Router (System of Integration) and ERP Bots (System of Automation) to enhance controls and automation. With Cadency, your depreciation posting run will look like this:
- Use Cadency Close to manage period end close tasks (both manual as well as automated) and its workflow
- Cadency Close triggers the automated task using the Close Action Plan Router (APR) integration
- Use Cadency’s out-of-the-box ERP Bots to run periodic asset posting and depreciating posting natively within the ERPs such as SAP® ECC, S/4HANA, Oracle EBS, etc.
- ERP Bots use text analytics to analyze depreciation reports, and then logs and calculates variances as an additional parameter to check the correctness of run
- ERP Bots use Close APR to update task status in Cadency Close
- Cadency Close triggers the next task set up in the close task plan
This is what the fully automated touchless close process looks like after implementing our Cadency solution:
Adopting the above approach streamlines the period-end close process and frees up valuable human resources to do cognitive tasks as the demands of the CFO organization grow to become a more strategic player. In one customer example, it saved ~3600 hours per year by just automating depreciation posting. Now Imagine this for hundreds of other automation scenarios.
For more information on how Cadency can transform your Office of Finance, contact us.