A finance team thrives when it focuses on data analysis and big-picture insights. To do that, they need to reconcile transactions faster and with a greater level of accuracy. An inefficient close process can prevent CFOs from adding value to their organizations. Inaccurate data and delays can lead to a stalled workflow, and poorly defined staff duties and responsibilities increase risk. These issues consume all of finance’s time and don’t leave room for anything else.
CFOs Want An Accurate Month End Reconciliation
CFOs need a month end reconciliation process that is faster, reduces risks and costs, provides a clear audit trail and, ultimately, allows them more time to focus on data analysis and big-picture insights. While this sounds ideal, finance departments continue to rely on the same manual or semi-automated tools that result in labor-intense, stressful routines that lead to a lack of visibility.
This is bound to change. According to EY, 81% of senior finance leaders from around the world agree that core finance processes will be automated at scale within the next three years. Further, 83% believe that reporting will become more on-demand; leaders will be able to view near-real-time reporting using self-service tools and dashboards.
Despite these projections, many organizations are only just beginning their automation journey. A recent market survey found that 40% of CFOs don’t trust their reported financials and 69% rely on spreadsheets to plaster over gaps in that reporting. Clearly there’s a lot more uncertainty around the process of month end reconciliation than many may realize.
Prepare For The Future With Reconciliation Software
Many CFOs accept the month end reconciliation process as a crucial but cumbersome part of accounting. They can identify the various accounts and sub-ledgers that take up most of their team’s time, such as:
- Bank reconciliations
- Foreign currency accounts
- Direct payments
- Balance sheet substantiations
- Intercompany accounts
- External suppliers
Ironically, accounting teams spend most of their time manually processing transactions that already match, rather than identifying and researching exceptions. In order to start looking toward the future – and to improve where they stand today – CFOs need to minimize the time required for month end close by streamlining their processes.
Eliminate manual tracking
Accounting teams can leverage technology not only to reconcile existing matches and highlight exceptions, but also to track their progress in real-time on one centralized platform. CFOs can focus on uncovering important insights rather than devoting their time to the minutia of basic tasks.
“I truly feel having the Adra solution has taken a load off my plate that used to be spent tracking what journal entries and reconciliations have been completed. I can now focus the majority of my time and energy on strategic initiatives that help drive our business forward.” – Diane Foss, Director of Finance, Genesis Systems
Improved tools make meetings unnecessary
Manual processes require devoting valuable hours to status updates and meetings to touch base. With reconciliation software, the whole team can instead share ownership while getting back tangible time. Over the long term, the added visibility from the software allows for less in-person meetings which can add up to a major amount of time saved.
“We used to have a 15-minute meeting with 8 people those first three days of month end reconciliation. That was 6 hours every month of human capital we were investing. Or, if you look at it on an annual basis, it was almost 2 weeks of time being spent. Now I click on a button and can see a dashboard of the status in real-time.” – Diane Foss, Director of Finance, Genesis Systems
Especially as work-from-home initiatives and remote work practices continue to grow more commonplace, the improved visibility is even more valuable.
Moving From Transactional to Strategic
This shift in approach ties in well with the current financial revolution, as the role of the CFO evolves from a number cruncher to a strategic advisor. Organizations need a CFO who provides objective advice concerning risk management, M&As, business development, future forecasting, and more. Utilizing financial close automation software such as the Adra Suite not only allows CFOs the flexibility and visibility they crave, but the opportunity to plan for the future.
Written by: Nathan Stabenfeldt