There is a big bottleneck
Their finance departments continue to rely on the same manual or semi-automated controls that result in labour intense routines, lack of overview and stress. According to EY, the big bottleneck is often related to transaction-intensive processes that consume up to 59% of a finance department’s time and budget.
Some mind-boggling facts
The facts are startling. According to a survey we did, only 28% of CFOs actually trust their reported numbers. And roughly three quarters of all companies still use time-consuming, error-prone manual routines, according to EY. This means that, when reporting account reconciliations to their C-suite colleagues, there’s a lot more “guesstimating” than many realize.
Free up time
When it comes to reconciliation, many CFOs tell us the process might be cumbersome, but it’s a necessary part of accounting life. They are referring to various accounts and sub-ledgers relating to the following time thieves:
• Bank reconciliations
• Foreign currency accounts
• Direct payments
• Balance sheet substantiations
• Intercompany accounts
• External suppliers
Ironically, one of the problems with data matching is that 95% of the time is wasted on transactions that already match rather than problem entries that require extra attention. So what’s the hold-up? Why aren’t more companies adapting to the finance transformation going on?
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 and Excel bank 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
Moving from transaction to adding value
This way of thinking ties in well with the innovative finance revolution going on today, where the role of the CFOs is evolving from being a number cruncher to that of a valued strategic advisor. Why is this so? Quite simply, because we are living in times when the organisation really needs a CFO who can provide objective advice of risk management, M&As, business development, future forecasting and more.
Would you like to streamline your reconciliation management to work more strategically using automated cloud-based software? Read more about how to do just that.