Digital Transformation: Streamlining Financial Close and Consolidation
A 2018 survey showed that 70% of CFOs in North America believed that digital transformation in their department was inevitable in the next few years. Two years later, the Covid-19 pandemic became a key driver of digital transformation in Finance. The lesson learned was that in a fast-changing business environment, where speed and adaptability are critical to success the winners are typically the organizations that optimize existing processes using the latest software and industry knowledge.
Transforming Financial Close and Consolidation
A critical success factor in digital transformation is having a modern, unified software platform that can streamline, optimize, and upgrade critical business processes. A great example is the financial close and consolidation process. By reducing reliance on Excel spreadsheets and retiring fragmented legacy software applications and outdated processes, your finance department can save a significant amount of time and optimize available resources over the long term.
The purpose-built features and ease of use of modern, cloud-based financial consolidation software solutions, have driven increased adoption over the past few years in finance departments of many medium and large enterprises. However, finding a solution to address all your department’s requirements is not an easy task.
Selecting the Right Software
There is an ever-increasing number of financial close and consolidation vendors and software solutions to choose from. Some of these solutions focus only on supporting the financial close and account reconciliations process. There are others that provide more comprehensive support for your corporate performance management (CPM) processes including financial close and consolidation, financial reporting, planning, budgeting, and forecasting as well as business intelligence, and analytics. The key advantage to the latter approach is having a single, unified data source for actuals, budgets, plans, and forecasts that can be leveraged across the enterprise for financial and operational reporting and comparatives.
You also want to avoid users having to open and navigate across multiple systems, forms, Excel schedules, ERP tables and windows, and any other supporting documents to perform account reconciliations, which is a key component of the financial close process. The goal is to have a common system that compiles multiple datasets for you so you can open one form and view all the necessary information to reconcile your accounts in one place.
Implementing the Solution
Implementing a new financial close and consolidation solution that will meet your requirements also requires good planning. There are many good options on the market, with proven methodologies and features, but your company is unique! In order to retire the multiple legacy systems your department uses and find the best financial close and consolidation solution for your requirements, you need to design a blueprint and a project plan that covers the implementation steps (including some data cleansing in advance), the possible setbacks, and the expected results.
To get the most out of modern financial close and consolidation software and save valuable time and resources, the most important thing you should do is prioritize your needs. Ask yourself which parts of the financial close, consolidation, reconciliation and reporting process take up the most time, where is there room for automation, and what features your department can’t do without.
Although the benefits might seem impressive, don’t rush your decision. The implementation is a critical process that can consume your team for 6 months or longer and you want to make sure you are getting the most value out of new software. It’s also important to ensure the solution you are selecting meets your requirements today, but also 3- 5 years down the road as your organization grows and evolves in complexity. Select a shortlist of vendors and schedule demonstrations for your team or hire an implementation consultant to help you narrow down your choices.
The more time and resources your organization saves with a modern financial close, consolidation, and reporting software solution, or a broader CPM software solution, the more time your team can spend on financial analysis and management, thus being able to do much more than simply deliver financial results. This is especially important in this day and age when things can change overnight, and every insight you can gain or risk you can avoid must be taken into consideration for a better outcome.
To learn more download OneStream’s Conquering Complexity in the Financial Close white paper and contact Delbridge Solutions if your organization needs help selecting and implementing a software solution that can transform your financial close, consolidation, and reporting processes.
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