In our rapidly evolving information era, new rules and regulations pressure businesses to consolidate their financial reporting process. But depending on your financial system, running these reports can require extensive manual work, exposing your reporting to user errors. While many businesses have turned to enterprise resource planning (ERP) automation, a recent article claims less than half of companies’ automation initiatives are currently meeting their objectives. Combine these factors with a lack of workflow coordination, data inconsistencies, and feeble post-close review, and you have a recipe for disaster.
Organizations and CFOs often encounter problems with data quality management, missing skills and resources, support of the executive suite, and a lack of clear processes. If your company is spending more and more time on the financial close process, it is probably time to upgrade to a more agile approach. Start with these steps to improve your financial close process and streamline reporting.
1. Understand the systems currently in place.
Is your organization fully utilizing the features available in your current financial system? Evaluate software utilization, potential overlap, areas of overcomplexity, and poor standardization processes. A thorough review of your current system’s capabilities will help you understand what’s possible and introduce efficiencies to your organization.
2. Look for automation gaps.
The primary purpose of an enterprise resource planning (ERP) or financial management system is to provide a central database of all system applications. Robust database systems are key to modern finance departments; but aren’t always ready to scale. Companies can fill the gaps in their current system with add-on point solutions or robotic process automation (RPA) but should be aware of cost, maintenance, and security implications. Plugging the gap will likely require a more strategic approach. Our professionals can help you orchestrate and implement process transformation that works with your systems and your business.
3. Control the data.
Poor-quality data can act as a stopgap. Make the time to understand the purpose of the data used in the business, where the numbers come from, and their relationships with other metrics. To reduce these speed bumps along the way:
- Ensure your system is expendable for potential needs.
- Develop a responsibility workflow, so everyone knows who owns what data points.
- Integrate with other systems for real-time collaboration with other uses.
4. Prepare for change.
Change is well and good, but progress will stall if you don’t have the support of the executive team or the people who will be implementing the change. Make certain the proposed changes align with the organization’s strategy. Then, align the people to the processes and each other. Organizations need to be able to pivot quickly. With buy-in from the correct individuals, you can shift your organization toward the future when regulatory updates arise or gaps are exposed.
Use these steps to build a technological infrastructure that allows for change and drives data efficiency. If you need recommendations on streamlining your financial reporting processes, contact our team of advisors today!
Treasury Circular 230 Disclosure
Unless expressly stated otherwise, any federal tax advice contained in this communication is not intended or written to be used, and cannot be used or relied upon, for the purpose of avoiding penalties under the Internal Revenue Code, or for promoting, marketing, or recommending any transaction or matter addressed herein.