Why Automate the Record–to–Report (R2R) Process?
Recent research shows there are many reasons but first and foremost is:
The cost of finance is increasing due to the regulatory mandates that are being put in place globally, not just in the SEC filing space (see our XBRL International Blog post by Rob Blake following last week’s XBRL International conference in Dublin).
Companies are now looking closely at the Record-to-Report cycle and the processes that support this to reduce costs through automation, standardization, risk management, workflow and tighter controls that will accelerate the financial close and allow collaborative working thereby providing reductions in costs. (Hackett key issues for 2013)
If steps are taken to make the R2R cycle less manual, a company can make significant savings. Thought Leaders benchmarking statistics reveal that top performers spend on average 0.08% of their annual revenue on R2R efforts. However this reaps huge benefits as for every $5B of revenue: $4.2m in R2R process efficiency is saved.
CFOs know that the required investment of time and money will reap the benefits in cost savings; however this is often weighed against the time to re-design and implement new processes and/or the software needed to allow teams to close faster. As 70% of enterprises still rely on spreadsheets & knowledge sharing portals to complete the financial close process, there is an enormous element of risk within the process today. (Three good reasons to automate the Last Mile of Finance)
In summary, rising costs and reporting time pressures are ensuring Record-to-Report is moving higher up the Agenda for CFOs.
Having the right person, do the right thing, at the right time is imperative; having them do it faster is the goal!