Ho-hum, another quarter-end close has passed. This process might seem routine, but how well is your monthly/quarterly close and reporting cycle working?
Is your close process fast and efficient? Or are you struggling through an extended process with spreadsheets and email or legacy applications that you’ve outgrown?
If the latter is the case, Planful recently held a webinar focused on how you can automate and accelerate the financial close, consolidation, and reporting process and free up more Finance time for value-added analysis. Does this pique your interest?.
Financial Close, Consolidation, and Reporting – Who Cares?
The financial close, consolidation, and reporting process is an important part of the overall enterprise performance management (EPM) cycle in organizations. Whether your organization is a public or privately held company, getting accurate and timely information to internal and external stakeholders is important to effective decision-making.
Many Finance professionals may think that only large enterprises need a formal financial consolidation process and system. But the need for this is less about company size and more about business needs. Even small and mid-sized organizations may have needs that require a more formal approach. Here are some of the signs that you may need a financial consolidation system:
- You have to collect data from more than one GL or ERP system
- You’re going through organizational change – for example, if you might be embarking on an acquisition strategy
- You’re expanding internationally, which often brings new complexities, such as currency conversions and intercompany eliminations across multiple divisions and subsidiaries
- You’re preparing for an IPO or external audit, which requires having rock-solid financial statements
So what does the financial consolidation and close process entail? The financial close and reporting process crosses multiple systems, departments, and locations. It can also consume a lot of time and resources every month, quarter, and year-end.
According to a 2014 study by APQC benchmarking the financial close process, the bottom performers took 12 days or more to close and report their results to management. Then there’s additional time spent on external financial reporting and filings. The best performers were able to get this done in 5 days or less.
The advantage for companies with a fast close process is that they can spend more time on value-added analysis and decision-making – and deliver information faster to both internal and external stakeholders.
Many Hurdles to Overcome
Seems straightforward, right? But there’s more to it than meets the eye. Consolidating financial results might sound easy on the surface, but it’s more than just adding up numbers. In an organization that’s operating with multiple divisions, in multiple countries and regions, the process can become complex. This includes dealing with the following issues:
- Currency translation
- Non-controlling interest and minority ownership
- Intercompany reconciliations
- Multi-GAAP reporting (i.e., US GAAP, Canadian GAAP, IFRS, etc.)
Then there are complexities in reporting to multiple stakeholders:
- Internal management reporting
- Regulatory reporting and filings
- External board reporting
Managing all of these complexities with spreadsheets is nearly impossible and fraught with risk. So instead, most organizations leverage software applications designed to address all of these requirements – software that also helps them manage and streamline the close, consolidation, and reporting process.
Financial Consolidation and Reporting in the Cloud
Packaged software applications for financial consolidation and reporting have been around for roughly 30 years. I saw my first packaged application in 1987. It was IMRS Micro Control, running on an MS-DOS computer. IMRS later became Hyperion Software. These applications then migrated to Windows PCs, then client/server and web-based systems managed by IT.
Thousands of organizations have benefitted from the automation and control these applications brought to the financial close, consolidation, and reporting process.
Fast-forward to over the past 10 years, and there has been increasing adoption of cloud-based applications for financial close, consolidation, and reporting. And now this has become the preferred approach to deploying new applications.
In fact, many organizations are now replacing their legacy on-premises applications with cloud-based solutions. And this year, Gartner focused its Magic Quadrant Report on Financial CPM only on cloud-based solutions. And it recognized Planful as a leader in this market.
Why? Because cloud-based applications can be deployed faster, at a lower cost of ownership, and allow Finance to own and manage the system with little to no support from IT. In addition, new features are typically delivered on a quarterly basis, and upgrades to new releases are automatic.
Partner with a Leader – Planful
Planful provides a robust financial consolidation and reporting solution that’s used by hundreds of organizations and integrated with our planning and modeling applications.
Planful Consolidation helps customers accelerate financial close cycles by integrating data from disparate sources, consolidating their results following multiple accounting guidelines, and automating key processes. Such processes include adjusting journals, intercompany eliminations, and accounting for non-controlling interests.
Our Consolidation module also helps reduce costs of compliance by generating a broad range of financial statements, with all of the right controls and audit trails to document each step in the process.
And it helps improve control and confidence in results, with a single version of the truth for financial and operating results. Plus it has workflow and process controls to ensure all required tasks are completed.
Planful Reporting supports the production of presentation-quality financial and management reports, as well as ad-hoc reporting. It’s a true end-user reporting tool that allows Finance users to easily create reports and templates, without programming. In addition, it gives end-users the ability to automatically generate reports and burst them out to managers via email and PDFs.
Our Reporting module also automates the creation of regulatory filings, board books, and presentations that combine text, reports, and charts into a single automated document. This eliminates most of the usual cutting and pasting of information from different sources and accelerates the production of vital documents.
To learn more about the advantages of moving your financial consolidation and reporting process to the cloud, check out the replay of the webinar, which includes an overview presentation, customer examples, and a live demonstration.