Today, the pressure is on at finance departments to embrace digital transformation and do more with less. You face shorter budget cycles, a growing need to deliver timely and accurate reporting and cut costs. At the same time (and here’s the kicker) they want you to play a bigger role in offering strategic guidance and advice. What to do?
If you work in a finance department, you may be smiling and thinking: “Sure, I’d love to be more involved in strategic discussions but I’m drowning in month-end close responsibilities.” To further complicate matters, your company may be growing fast, undergoing M&A activity or entering into complex cross-border business ventures.
Identifying core weaknesses first
Most likely, the benefits of cloud-based software are nothing you dispute. Sure, in an ideal world you’d love to have pre-defined tasks with clearly designated approvers and reviewers for every workflow. Or get a real-time overview of the relevant status, data and documentation. But you also know that automation is only part of the answer. You need to first identity core weaknesses in your current financial close process. So what areas should you focus on first?
According to financial experts, there are three key areas to focus on for securing a more efficient financial close:
1. Get a unified status overview
2. Create standardized approval workflows
3. Secure safe, retrievable documentation
Unified status overview
Achieving a clear status overview has to be a high priority. It’s no secret that modern finance departments now use automated dashboards to quickly spot high-risk accounts, key milestones and prioritized tasks. While others were procrastinating, they’ve boldly moved from ad-hoc manual or semi-manual routines embedded in cumbersome spreadsheets to a more centrally planned process with assigned roles and tasks that are visible to both preparers and management. Automation software can help you move from policing every task and procedure to monitoring overall progress and analytics as part of your daily routine.
Standardized approval workflows
One big challenge with programs like Excel is that it’s difficult to apply for standardized processes. There is a tendency for employees to work in individualized silos with little or no proper oversight. There is often also a poor segregation of duties. An automated system helps to simplify the approval process with one, purpose-build solution that enables a segregation of duties for every account and task. Digital sign-off and designated approvals also secure full control and oversight before reporting – allowing for full traceability.
Safe, retrievable documentation
Finally, as anyone who’s been through an audit process can attest, the ability to store and retrieve financial files is critical. In a spreadsheet or paper-based environment, supporting documentation for open balances is often handled in ad-hoc ways. This makes it especially challenging when you’re facing a group of auditors who want it all NOW. With a secure, cloud-based server for all tasks, reconciliations and supporting documentation, it’s easy to retrieve audit trails showing exactly who did what. Need to go ten years back? No problem.
Well, broadly speaking, these are the three areas that high-performing companies are focusing on to make their financial close process more efficient. Does this sound like something you’d need to improve for your own company?
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