Content We Love — Why CFOs are Making the Financial Close a Non-Event

How productive is your R2A (Report-to-Analyze) process? As accountants, we talk about the Record-to-Report (R2R) process quite often. Less discussed is your R2A process – when important business decisions and financial close process improvements are formulated.

However, because companies perform their R2R process with inefficient manual work, there is little time remaining for financial planning. Of course, R2R is especially critical to your company, particularly when it comes to areas such as government-mandated compliance with specific regulations, but there should be much more time devoted to your R2A period.

Adopting a “Smart Close” Approach

Capgemini wrote an article focusing on the necessity of the R2A process as a catalyst to add more value to your organization. And to be able to focus more on the R2A process, finance teams must first adopt a “Smart Close.” [1]

To embrace a “Smart Close”, as Capgemini calls it, CFOs must utilize all tools available to them. First, recognize that Financial Planning & Analysis should involve all components of the finance team, not just FP&A. By involving all areas of your finance department, you gain a real-time understanding of where your financial close currently stands and how to improve upon it.

Reviewing Your Current State

Next, you must cut down on the cost and time it takes to perform the R2R process. Consider the flow of your current R2R process. How many spreadsheets does it take to complete your account reconciliation, and how many unseen errors lie in those documents? Do you know at what stage your tasks are at all times during the financial close?

In the article, Capgemini provides what they called the EOAR approach:

1.       Eliminate

2.       Optimize

3.       Automate what you can within your existing systems

4.       Robotics can be leveraged to extract the last remaining efficiencies

Leverage this checklist to determine what you can eliminate from your processes and then judge what you can optimize before you ever factor in robotics. Running your process through this checklist helps to ensure that you won’t be automating a poorly-executed process.

How to Automate Your Financial Close Process

To learn more, click on the banner below to discover how automation can significantly decrease the time and cost of your financial close process, and allow more time for analysis to support informed decisions for the future of your business

To read the Capgemini article in full, please click here.

[1] Borcharding, Marty. (January 17, 2017). Why CFOs are making the financial close a non-event. Retrieved December 20, 2018, Capgemini.

 

Written by: Ashton Mathai & Chelsea Downey

Don’t miss our latest blog posts – subscribe today and receive a weekly update on all the latest news, hottest topics and information!

Enter your email to subscribe:

  • This field is for validation purposes and should be left unchanged.