Why Organizations Need to Automate Their Record to Report Process
What does your Record to Report process currently look like? Are you processing everything manually through spreadsheets, or have you automated a few of your processes?
Whatever your current Record to Report process resembles, in order to truly transform your organization and lay the right framework for growth, you must automate across the entire Record to Report. Here are three reasons why automation is essential for your organization’s overall financial processes.
Research conducted by Audit Analytics has shown a climb in audit fees in the last decade. In 2010, companies were spending $7.2 billion on audits, but in 2018, that number increased drastically to $9.3 billion. However, the same study showed an almost 10% increase in companies that filed material misstatements from 2017 to 2018. Organizations are spending more on audit efforts than ever, yet it’s not enough. Why?
Companies are continuing to utilize spreadsheets and manual processes as the primary tool for their financial processes that aren’t automated, but spreadsheets are hotbeds of error. Up to 90% of all spreadsheets contain errors— a fact that is continually reflected in the amount of companies that are forced to release restatements each year.
Customers that used Cadency by Trintech, a financial automation software for your Record to Report process, saw up to a 10% reduction in risk of revenue impact due to misstatements. In addition, Cadency users reported a 75% reduction in time for rework and a 10% decrease in the amount of their write-offs.
Increased Control and Visibility
When automating their financial processes, organizations tend to take a piece-by-piece approach. And, while evaluating each piece— such as transaction matching and testing compliance controls— is important, maintaining control and visibility throughout each process is crucial.
With Cadency, customers reported up to a 60% decrease in internal audit effort. This is because the solution tracks transaction changes, supporting information, and much more in a detailed audit trail. In addition, Cadency users report a 20% reduction in time testing controls from the year prior to their implementation of Cadency. The control testing framework included shared controls and managing remediation activities.
Efficiency Gains for the Whole Process
Oftentimes, when companies choose to automate their financial processes they start with one piece, such as their reconciliations. They go through the hard work of moving away from manual processing standardizing the process and implementing automation to improve process efficiency and effectiveness. But that’s all they do. Their reconciliation process is automated, but what about their compliance, journal entry, and close processes?
Continually delaying the automation of your other processes has a ripple effect and, long-term, denies you the same level of effectiveness across the board. To truly transform your financials, finance and accounting professionals must take a step back and approach their Record to Report with a more holistic lens.
Cadency provides numerous benefits for your Record to Report process that your organizations can’t achieve when your financial processes ae handled with spreadsheets— including visibility, reduction in misstatements and overall efficiency gains.
To read more about how Cadency can transform your Record to Report process, download this whitepaper.
Written by: Ashton Mathai