How to Select the Right Financial Close Automation Software for Your Organization

Blog post

According to an EY study, 65 percent of the surveyed businesses reported that they believe that automating finance processes will be a significant priority in the future,1 and for a good reason. In recent years, the finance department has begun taking a more proactive approach in offering both thought leadership and decision-making support to the organization as a whole. And gaining both efficiency and visibility into close processes that are riddled with tasks too burdensome for a manual operation to effectively manage has been critical to achieving this goal.

However, while automating the close process has become an increased priority for financial professionals, it’s important to remember that not all financial close automation software is the same. When it comes to choosing between multiple RPA vendors, considering automation that is created in-house, and understanding advancements in RPA such as Risk Intelligent RPATM, organizations should take a step back to evaluate what they truly need an automated close solution to offer. In this blog, we have summarized the most important evaluation criteria for organizations to consider when choosing the financial close automation software that will best fit their specific needs.

1. Can it solve your current problems?

While it may seem obvious, there has never been more close solutions for Accounting and Finance teams to choose from than there are today, however, not all options provide the same level of benefit and flexibility. Because of this, evaluating if a solution can solve their organizations’ specific use case can be overwhelming. However, almost every solution falls into one of two categories: point solutions or an end-to-end solution.

Point solutions are used to solve a specific problem and generally address a singular aspect of the financial close process (I.e. a tool used exclusively for managing the month-end close checklist). While these can certainly benefit an organization in scenarios where the processes are disconnected from other aspects of the business, point solutions are often limited in their ability to communicate with dependent processes. Generally speaking, this results in either continued purchasing of additional solutions, or the workload being reallocated to a task that offered the same level of visibility, value and efficiency as the accountant performed before the solution was implemented.

End-to-end solutions, on the other hand, take a more holistic approach. Instead of offering a narrow resolution to a problem, these types of solutions are fully integrated into a process in order to solve any issues, both seen and unseen, that can arise. While you can begin your automation process with a single process, an end-to-end solution is significantly more capable of growing with your needs.

With something as complicated as the financial close process, in most cases, it’s more advantageous for organizations to pick the solution that can be adapted to address any potential challenges unique to their needs as they grow.

2. Will it meet your future needs?

While meeting your current needs should be the first priority, it’s equally important that your financial close automation software can scale with you. While exactly how a company will scale their automation is on a case by case basis, there are some questions that you should ask in order to determine the value a solution can offer you in the future.

  • How many additional users can you add, and can you incorporate global users?
  • Can the solution be easily expanded to cover other parts of the close process in order to gain further efficiency and effectiveness?
  • Can the solution seamlessly integrate with new IT systems in the case of mergers and acquisitions?
  • Can the solution add global accounting standards as needed by expanding companies?

Asking these questions is crucial to ensuring that your organization won’t start looking for a replacement solution in a few years or undergo the implementation of another point solution.

3. Does it fit your security roadmap and IT environment?

If you’re considering automating your financial close process, or any process for that matter, it’s important to bring in your IT team early. Just like all software, IT or procurement departments often need to be involved with the conversation early in order to avoid integration complications and alleviate security concerns. Primarily, this is because organizations naturally build up their internal financial application ecosystem through either acquisition or sheer necessity. And depending on the solution, integrating with the overall IT environment can prove difficult or even impossible. Tools like appropriate ERP connectors are necessary in order to ensure that your organization’s choice in financial close automation software is even a feasible one.

Additionally, protections such as end-to-end data encryption, public/private key pairs for client-specific encryption of all data to protect the information housed in cloud solutions, and annual third-party audits can be necessary in order to meet the requirements of an organization’s security roadmap. These types of comprehensive safeguards, and those like them, are crucial for any office of finance, especially those working globally or handling sensitive data.

4. Where to Go From Here?

By implementing financial close automation software, from how journal entries are prepared and posted, all the way to the close task list, you can provide a reliable and repeatable close process that reduces both the time to close and financial risk.

  • Automating your close process offers:
  • Visibility into areas for process optimization
  • Reduction in time to complete and monitor close tasks
  • Reduction in time to prepare for a close
  • Reduction in write-offs
  • Risk mitigation
  • Identification of bottlenecks in the workflow

However, it’s important to find the solution that best fits the needs of your organization in order to maximize the benefits that can be gained.

To learn more about the impact that financial close automation software can have on your processes, check out our eBook.

[1] EY (February 2016). “Is the future of finance new technology or new people?” Retrieved January 6th, 2020, EY