What is ‘Last Mile’ of Finance ?
Financial process often ends up in a final stage of releasing the ‘financial statement’ along with several disclosures required by regulators and management. Also different regulators have prescribed electronic filing of the disclosures through XBRL format. This final stage of filing information is often known as ‘Last Mile’.
Challenges for ‘Last Mile’:
Time pressure – This piece often needs lot of collaboration across different departments. Since it involves different people, monitoring the status of the preparation and making sure everyone completes their tasks is a very important challenge to ensure timely delivery of financial statements. Also its very iterative, where people need to review and also drive consistency in the information that needs to be presented, often leading to stress as its very much time bound
Data quality – Every company has data coming in from different sources – from different ERP systems, other operational systems, unstructured data coming from people’s documents and spreadsheets etc. In addition, during the financial close there are several top side adjustments that are made and its essential that the latest data after these adjustments are considered for statements.
Audit Trail – Financial data is very sensitive and needs to be audited. There needs to be internal controls to ensure that there is track of who is making changes to the data. Often this is a nightmare for the auditors to make sure they can orchestrate this and ensure the financial statement reflect the correct position.
Next Gen Regulators – Regulators want more automation to ensure the data they get is representing the accurate information. Regulators are also looking at next generation approaches such as XBRL (US SEC), iXBRL (HRMC), E-Bilanz XBRL-based (Bundesfinanzministerium) etc. to ensure seemless passing of data to them in electronic forms.
Technology solutions for covering ‘Last Mile’ – Key requirements to meet the challenges
Collaborative workflow – to manage the full process of monitoring, reviewing and submitting the financial and non financial statement preparation is key to reduce the time and allow seemless interaction between the various people from different departments involved in the process
XBRL – Support for filing xbrl tagging and taxonomies are another critical requirement for this tool, so that new regulatory requirements for XBRL filing can be automated
Easy user interface – As this whole process is managed by business users, they really would like very simple and easy to understand user interface such as Microsoft Office, to reduce their learning
Regulatory compliance content – Available of standard regulatory compliance as content would allow them not to be keeping track of the regulatory needs
Integration to Data source – Critical to have out of box integration to ERP (SAP) and other source systems to pull the data required for statements. Given that many best run business run SAP, its critical that there is integration to SAP’s ERP, Consolidations and Business warehouse solutions
How does SAP support ‘Last Mile’ of Finance:
SAP announced recently announced the intent to acquire Cundus AG that exactly covers the above functionality very well. This solution that would be called as SAP BusinessObjects Disclosure Management, would be a key component of the End to End Accelerated Financial Close solutions provided by SAP and which is a key theme to enable business to Run Better and enables Financial Excellence.
The SAP BusinessObjects Disclosure Management has been released for our customers on April 29,2011.