Releasing the corporate financial statements in less than 7 days is a goal many companies still strive to do today. However, undeniably, this goal is easier said than done for a variety of reasons.
In fact, according to one of the surveys done by KPMG, almost half of the organizations they surveyed required 11 days to complete financial reporting and more than 15% of companies needed more than 15 days to complete the same.
Data posting errors, errors in setting up allocations, tedious and time consuming general ledger process as well as data maintenance challenges are few of the reasons why releasing financial statements in 7 days or less still seem like a dream to many organizations despite the fact that they try so hard.
Given that the finance consultants in Performance Canvas have worked with over 2,500 companies in the last decade or so, we decided to come up with a concrete list of tips on how to achieve that goal of releasing financial statements in just 7 days.
That being said, being able to release financial statements in 7 days or less requires best practices not just in a single aspect of finance and accounting processes. It requires implementation of best practices across various finance and accounting processes for this goal to be realized.
Here are some of these processes and the corresponding tips on how to improve them:
- Best Practices in General Accounting
If your company wants to release financial statements in less than 7 days, the first process you should look at is General Accounting because this is one of the linchpins of finance and accounting.
Therefore, it is important to use standard naming conventions and to make sure that standard and non-standard journal entries must be defined as clearly as possible to attain consistency and standardization within the finance and accounting process.
In addition, the approval hierarchy must be clearly defined and assigned with clarity so that there is greater control and transparency.
- Best Practices in Account Reconciliation
Account reconciliation process is one of those processes whereby if done correctly can really save your company a lot of time and effort.
One of the best ways to optimize this accounting process is to automate it while placing business rules that help control and reduce issues proactively, not reactively.
There are also other rules that should be implemented in order to streamline the process even more such as within reporting, high level analytics or risk identification.
In this process, it is also vital to make sure that your company is able to do real time monitoring of activities or transactions.
- Best Practices in Month End Reporting
For many medium to large organizations, it is important to have an ERP system. Whichever brand of ERP system that maybe shouldn´t really matter as long as the ERP system works well to streamline the processes within the organization.
With the help of the ERP system, it is important to ensure that activities are closed using workflow driven solutions to give better structure and organization.
On top of that, it is important to always maintain a clean database of contact information for stakeholders, service providers or contractors as well as other significant parties involved.
- Best Practices in Intercompany Accounting
If your company owns subsidiary companies across the globe, this part of accounting becomes very critical because intercompany accounting done right helps reduce errors.
One of the main challenges of intercompany accounting is the maintenance of an end to end process documentation that must be done in the simplest, most consistent, and standardized manner.
It is also important to automate this aspect within your organization because doing this manually not only leads to increased errors, it also adds up to time spent significantly.
KPIs or other metric management activities must also be constantly reviewed and discussed to make sure that all companies are measured using roughly the same set of relevant criteria.
By having many companies/subsidiaries that a finance department has to deal with, it is also a smart and imperative best practice to make sure that there is an escalation process that can be dutifully followed in case of problems.
- Best Practices in Fixed Asset Management
One of the ways for your organization to save money is by looking at taxes through depreciation deductions with the aid of fixed asset management.
In this aspect of finance and accounting process, it is important to have this automated because it pays for asset activities and depreciation charges to appear real time on the ledger.
It is also important to use a system that can meet all the authority´s tax requirements and that the corporate tax system is connected through an automatic link.
By looking at these 2017 tips on how to release financial statements in less than 7 days, one can notice that a lot of it requires automation of the accounting process but perhaps equally important is the realization that automation of a bad process does not always lead to improvement instead, it only highlights the loopholes within the process.
Therefore, both streamlining and automating of accounting processes must go hand in hand.
Performance Canvas by DSPanel is one of today´s modern CPM solution that offers not just automation of financial reporting, budgeting, planning, performance management, and consolidation activities, it also promises streamlining of all these processes to ensure outputs that are trustworthy, accurate, and reliable.
A stable and efficient CPM solution like Performance Canvas ensures increased efficiency and shortening of the cycle time affording organizations achievement of their goals even with skeletal staffing and scarce resources.
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