Three steps to moving up the value chain

Financial Close Management

Not long ago, reactive finance departments were the norm, suffering from rushed processes, vague routines and poorly documented approvals. Surprisingly, many of these problems still remain.

In this post, we explore how modern cloud-based software can usher in a new era where financial managers have complete control over documentation and approvals, a real-time overview of every task, and far more time for ongoing analysis that leads to continuous improvements for their company.


A startling figure you need to know

High-performing companies save an average of €5.8 million each year, according to an EY survey of large and mid-sized Nordic companies. The key to this is in their use of structured processes and modern financial close software to achieve a higher degree of efficiency, enabling them to spend much more time on analysis, and far less on transactions.

This kind of saving, in terms of both money and time, is vital considering the current industry pressures.


Key industry trends and drivers


1. Digital transformation is here to stay

Technologies like cloud computing, mobile, automation and analytics are delivering dramatic improvements in efficiency. Many finance departments are tapping into this trend, with 82% of CFOs pointing to cloud applications as the future of their business applications.


2. Cost reductions – doing more with less

Like everything else in business, there is increasing pressure on finance departments to deliver improved results, often with fewer resources. Many CFOs, under pressure to perform more efficiently and add value, are taking a hard look at their current cost base.


3. More regulatory and other demands
 (SOX, etc.)

New regulatory and audit control requirements are putting pressure on companies to be compliant and follow good corporate governance. Problems with data quality are often cited as
 a major pain point.


4. Not enough time for analysis

One of the biggest complaints of CFOs and financial managers is they spend more time on producing financial reporting, with little time to actually analyze it. Tomorrow’s successful finance departments will find ways to automate repetitive tasks, making time to act more as advisors.


5. A faster close is a requirement

In today’s fast-moving world, agility and speed of response are not only essential, but often required by local authorities or other stakeholders. A recent study by EY of 146 large Nordic companies showed that the high-performers spend five days or less on their monthly financial closing process.


According to Accenture, productivity in finance departments will increase two to three times by 2020, while organizational costs will decline by 40%. They also predict a dramatic shift in time spent on analysis – from just 25% today to 75% in the future.


The 3 key aspects of a more efficient financial close

3 Key Aspects of Financial Close

Financial managers may think the list of potential improvements seems endless, but automation is only part of the answer. They will also need to make significant changes to their financial close processes, introducing pre-defined tasks, procedures and shared milestones, real-time overviews of the relevant status, data and documentation, as well as designated preparers, approvers and reviewers for every workflow.

A more focused approach starts with identifying the core weaknesses of current processes – those time-consuming sources of errors, unnecessary waiting and awkward discrepancies. In most cases this all boils down to three key areas, all of which can be resolved with the help of modern, purpose-built software.


1. Unified status overview

Go from month-end stress to non-stop control

Are we done yet? Have we hit our milestones? Unfortunately, the most common spreadsheets offer few solutions for managers who need a real-time overview of which tasks have been prepared and approved according to their timetable. To deliver high-value strategic insights, financial managers need to move from policing every task to monitoring overall progress and analytics as part of their daily routine.



Inefficient status checks with email updates, status meetings, decentralized information and complex, error-prone spreadsheets
  • High risk of errors due to late journal entries and last-minute approvals, leading to corrections and investigations only after reporting
  • Unclear responsibilities and peak loads causing unnecessary stress and costly employee turnover



  • Dashboard overviews providing a single real-time overview of the status of all tasks, highlighting high-risk accounts, key milestones and high priorities tasks at all times
  • Centrally planned processes with assigned roles and tasks visible to both preparers and management
  • Monitoring and control software with designated alerts and process analytics that reduce risk and enable up-to-the-moment reporting and follow-up for all stakeholders


2. Standardized approval workflows

Move from individual silos to total accountability

Many things may cause staff to violate the so-called Four Eyes Approval Principle, leading to digression from industry best practices. A shift from Excel-based silos to high-visibility workflows with standardized procedures and full traceability can deliver immediate results – bringing insights, discrepancies and high-risk accounts to the direct attention of financial managers well before it’s too late.



  • Lack of standardized procedures with each employee working in a separate silo, individualized workflow and with little to no proper oversight
  • Poor segregation of duties, typically due to the use of Excel, which can cause unclear workflow approvals and often results in only a single managerial approval
  • Difficulties handling rejections and revisions, flawed routines and random sampling of accounts preparations



  • Simplified approval processes with one purpose-built solution enabling segregation of duties for every account and task
  • Digital sign-off and designated approval with a secure system ensuring full control and oversight before reporting
  • Easy management of rejections and revisions with full traceability for the entire approval workflow


3. Safe, retrievable documentation

Shift from ad-hoc panic to
 one-click review

In a spreadsheet-driven environment, with local servers and printed documents, supporting documentation for open balances and specifications is often handled in a number of ad-hoc ways.

Modern financial close software makes it possible to securely store all relevant documents and journal notes for years, just one tamper-proof click away from the task under review, saving hundreds of hours of headaches.



  • Local server-hosted documentation with web-based links where files might be deleted, written over, moved or misplaced over the required minimum of at least ten years
  • Documentation loaded directly into the spreadsheet leading to extremely heavy les containing countless accounts and tabs
  • Physical print-outs of every page stored in binders, the method favored by a full 62% of companies in our survey, causes excessive printing, organizing and archiving costs



  • A secure cloud-based server for all tasks, reconciliations and supporting documents
  • Automatic audits trails specifying exactly who did what, where and when
  • Secure data retrieval from authorized users or auditors for ten years or more into the future


What do you gain from focusing 
on improving your closing process?

Inefficient delivery processes are slowing down response times. Per-Øyvind Borge-Hansen, at EY Oslo’s Financial Accounting Advisory Services (FAAS) unit, says high-performing companies not only produce higher-quality reporting more quickly, they achieve this while spending less money than average.

According to their Nordic Closing excellence survey, high performers’ finance function costs are approximately 1.2% of their revenue, while the population average spends 1.4%.

The reward for transforming your approach is a faster, higher quality, more cost-efficient financial closing process, resulting in an output that is more value-adding and better aligned with the company’s strategy.


How can your financial close add more value today?

The three areas we’ve identified are critical building blocks for any successful digital transformation of the financial close. Whatever systems and policies you have in place, make sure you’ve covered the following points as part of your transformation checklist:

  • Clearly define your transformation vision for senior management – what will the future financial close look like, and what business value will it create?
  • Where possible, quantify the risks and inefficiencies of current practices and benchmark against industry standards
  • Start with the big picture, adding clear milestones and notifications for high-risk and prioritized tasks
  • When opening a new task, always assign
 a specific preparer, approver and reviewer, with clearly defined procedures and deadlines for each role
  • Invest in financial close software to ensure full digital certification and traceability for every task
  • Invest in a secure cloud-based solution for safe archiving of all supporting documentation
  • Always opt for transparency, with shared timelines, policies and procedures easily accessible to relevant staff

Download your guide to Financial Close Management 

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