3 Myths Financial Close Automation Vendors Will Try To Tell You
When selecting a financial automation solution for your finance and accounting team, you want to ensure the solution is the right fit for your organization. But, when entertaining your options, you might hear a few assumptions about your processes and your goals that are not true.
Here are three myths about financial close automation that some vendors may try to tell you.
1. “Shortening Your Close Doesn’t Mean You Need To Change Your Current Processes”
For decades, accountants have been using spreadsheets to execute their financial processes. Though spreadsheets are important to the financial close, they should not be the sole tool accounting teams are utilizing. Spreadsheets, and the manual processes they inevitably perpetuate, increase the risk profile of an organization exponentially. 88% of spreadsheets contain errors that can lead to misstatements and fraud. Additionally, spreadsheets provide very little visibility into the financial close, so these errors are very likely to pass through unnoticed until it’s too late.
Though some financial close automation solutions in the market may offer a quick implementation with more familiar tools, such as spreadsheets, performing an error-filled process faster does nothing to minimize the risk created for your company. In fact, applying automation to an inefficient and ineffective close process could do more to harm your office of finance than help it.
Additionally, consider the limited flexibility that a spreadsheet system offers. How far can your organization go using spreadsheets and shared drives as a repository? Spreadsheets cannot scale with your organization like financial automation solutions. Spreadsheets have their place in the office of finance, but shouldn’t be relied upon to complete the entire close.
2. “More Solutions Is Better”
Though some financial close automation vendors might seem to offer more bells and whistles with a larger number of solutions to buy, Adra by Trintech has much of the same capabilities embedded throughout the suite. As an example, an Adra user can use Matcher to solve intercompany matching at a transactional level and then reconcile the account in Balancer. For journal entries, the goal of the Adra Suite is to reduce the number of journal entries required, instead of enabling an ineffective process.
Adra offers much of the same capabilities as other vendors. It’s simply wrapped up in the technology, instead of charging your organization for extra solutions and features you don’t need.
3. “Utilize Continuous Accounting Instead”
Over the years, several topics and terms have created buzz in the finance and accounting space, such as the term “continuous accounting”. Typically, continuous accounting refers to distributing close cycle tasks more evenly across the entire accounting period, rather than saving these activities for the tail-end of the period. Though this might seem like an innovative technique to apply to your close, it does nothing to limit the amount of time and resources spent when manually completing close tasks.
Instead of performing continuous accounting over the entire period, Adra can automate and remove human intervention from some of those tasks. For example, in the transaction matching process, many, if not most, transactions do not require additional information or work in order to properly reconcile. Developing matching rules with Adra based on your organization’s specific needs will eliminate a large portion of these tasks. This allows your team to not only complete the financial close faster than before, but also carves out time to spend on higher-value activities, such as developing business-critical insights.
Instead of continuous accounting, your organization should be striving for continuous improvement through automation.
In addition to these benefits, organizations using the Adra Suite also have access to a faster implementation customized to your organization’s needs, instead of over a span of months. Adra customers also see immediate benefits as soon as the first month.
“The time we have saved through the automation of our processes has resulted in us being able to focus on higher value-added activities. We are very satisfied with our partnership with Trintech.” –Protector Insurance
Learn more about how Adra helped Genesis Systems by streamlining their processes, increasing their visibility and control, and significantly improving their efficiency.
Written by: Ashton Mathai