Soft close, hard close, legal close, managerial close, group close – Finance organizations around the world are using software tools to help meet deadlines and expectations around “closing the books”. Improving your financial close requires a cohesive and well-managed strategy to manage the systems, people, and processes, from transactional accounting processes to entity close, corporate, financial and management reporting, and disclosure. It requires strong governance, from centralizing compliance processes and controls, to managing master data. All this is now being done remotely.
Transforming the financial close is not a one-time project, it’s a continuous incremental journey, and the dividends to making even the first few steps to improvement can be substantial. Not only by cutting the cycle time of the close, and reducing risk and audit fees, but also the lowering the amount of the internal financial and accounting resources dedicated to close tasks.
By cutting the overtime, late nights, and repetitive work from the close, organizations who improve their financial close operations, will be better positioned to retain and attract high-performing or high-potential accounting talent in a business environment that expects finance to have a more strategic role.
There are many steps in the close process and so many improvement areas. Join us on February 16 for the Finance and Risk Virtual Summit and get more insights from peers and sap experts.
Max Koebler, SAP, on Improving the entity close process
To achieve a fast financial close, you need to complete multiple process steps accurately, on time, and in the correct sequence. Gaps in communication may cause delays that jeopardize close deadlines.
Many organizations manage this process with a check list, typically in Excel. Each entity within an organization needs to close their books and this involves many steps and often multiple people. Often different parts of an organization will manage subsets of the close, like by division or by geographical location. As such, many excel checklists are used to manage the process. As with most steps of the financial close process, such manual activities are error prone and time consuming. Managing the entity close process is one that can benefit from standardizing, centralizing, and automating.
Philip Aliband, SAP, on Streamlining the group reporting and consolidation process
Organizations must perform accurate and timely corporate consolidation and group reporting. Group-level financial consolidation is a critical task that comes with a high level of complexity and risk. With numerous different business entities, ERP systems, accounting regulations, currencies, and people involved, consolidation can be a challenge. Many organizations are working in a world of data silos, which cause inefficiency, lost time, and frustration. For example, isolated systems often lead to incomplete accounting records, lengthy reconciliation processes, and even multiple versions of the truth.
Unified consolidation offers an effective solution to these challenges. This new approach combines local close and group close, resulting in substantial gains in speed, accuracy, and group-wide transparency. Direct access to the financial data of group entities eliminates the need for multiple, separate closing tools. Local close data and relevant adjustments are immediately reflected in group reporting results without having to be manually transferred. As a result, the closing process is greatly accelerated, freeing up accounting and finance teams for more value-added activities and enabling them to become trusted advisors in the organization.
Krzysztof Noster, Stanley Black & Decker on centralizing the close process and automating account reconciliations
Stanley Black & Decker achieves greater efficiency and automation in accounting, compliance, reporting, and transaction processes with SAP S/4HANA for central finance. They save time for higher value activities, but also reduce errors. They centralize not only their reporting but also accounting processes. With SAP Account Substantiation and Automation by BlackLine, Stanley Black & Decker was able to standardize and streamline closing processes, complementing and extending finance solutions from SAP. The cloud-based application enhances key steps along the way and supports continuous accounting practices, increasing efficiency, productivity, and data integrity.
This is why I’m so excited to encourage you to join the 2021 SAP Finance and Risk Virtual Summit!