Finance departments continue to rely on the same manual or semi-automated tools that result in labor-intense, stressful routines that ultimately create a lack of oversight. According to EY™, the biggest bottleneck is often related to transaction-intensive processes that consume up to 59% of a finance department’s time and budget.
According to Trintech’s recent market survey, only 28% of CFOs trust their reported numbers and roughly three-quarters of all companies still use time-consuming, error-prone, manual routines. This means that, when reporting account reconciliations to their C-suite colleagues, there’s a lot more “guesstimating” than many realize.
When it comes to the reconciliation process, many CFOs tell us it is cumbersome but also a crucial part of accounting. They are referring to various accounts and sub-ledgers that take up a majority of their team’s time, such as:
• Bank reconciliations
• Foreign currency accounts
• Direct payments
• Balance sheet substantiations
• Intercompany accounts
• External suppliers
Ironically, most time spent on this process is quickly wasted by manually processing transactions that already match, rather than handling problems that require extra attention. Why isn’t this changing? Why aren’t more companies able to find a way to accelerate this process?
Rethinking old routines
“There is generally a resistance to change and a heavy reliance on tried-and-true processes that may have worked ten years ago but are inefficient today,” observes Viktor Norberg, Group Financial Controller, Coor Service Management. “If you look around, many companies are still working in silos with ad-hoc routines, systems and cumbersome spreadsheets. The only way to simplify and streamline these processes is with automation.”
Saving 96 days a year
Five years ago, Norberg and his team of 40-odd people, responsible for reconciliation of accounts of the company’s business units across Europe, decided to automate their process. They moved away from Excel reconciliations uploaded to a central server. As a result, they saved significant amounts of time, freeing up staff to focus on strategic matters.
“Eight days – that is how much time we saved every month!
If you multiply by 12 months, that’s 96 days a year!”
Viktor Norberg, Group Financial Controller, Coor Service Management
This line of thinking ties in well with the current financial revolution, as the role of CFO evolves from a number cruncher to a strategic advisor. Why? Organizations need a CFO who provides objective advice concerning risk management, M&As, business development, future forecasting and more.
To learn more about streamlining your financial transaction process, check out our solutions.
Written by: Ashton Mathai