Financial consolidation or the combination of financial data from several departments or business entities within an organization for reporting purposes can be simple or complex depending upon how the organziation executes it. Nonetheless, it is an area of finance that is best automated because CFOs always aspire for a faster and efficient close.
Today, several tools are used in order to consolidate. Some use Excel, others utilize just their existing ERP system, and others have a specialized CPM software such as Performance Canvas by DSPanel for it.
To touch quickly on these three things: Excel, which is currently used by many companies, for financial consolidation makes the entire process unnecessarily long and error-prone owing to the limitations of excel spreadsheets.
ERP systems on the other hand, aside from being unable to perform all the tasks needed during financial consolidation, lacks the flexibility, financial analytics, and regulatory support needed for a fast and efficient close.
A specialized CPM software is the best option among the three tools because not only are these CPM solutions designed for financial consolidation automation, it paves the way for improved collaboration within the organization because more users can participate in the process.
Regardless of which tool you choose to go with, moving towards financial consolidation automation is the right step forward. So when it comes to trying to achieve financial consolidation automation, we have a few tips to share on how to maximize success.
- Map out your process before beginning
Before you even assess any vendor, make sure you map out your process. Involve your colleagues and have as many knowledgeable people participate in the process so that together you can discover gaps or areas for improvement in the process.
It is important that automating financial consolidation creates savings not only in specific levels of the organization but in all levels from bottom to top.
- Speak to someone with deep understanding of Consolidation solutions
Looking for a financial consolidation solution can be very intimidating. Therefore, if you feel very uncertain talk to an implementation consultant about your challenges, your concerns, what you are looking for, and how you envision the financial consolidation automation to happen.
There are several financial consolidation automation software out in the market today that it is easy to feel like a small fish swimming in an open sea which is why it is good to talk to someone who truly understands consolidation and to come up with a check list for every vendor you wish to evaluate to make sure that you are not only automating financial consolidation, you are also streamlining your process, and saving your organization several hours of potential work.
- Know what you expect from the Automation
Like with any software deployment, it is always good to know exactly what you expect and to voice these expectations clearly to your vendor. You need to have a solid grasp of how many hours you wish to save per month with the financial consolidation automation, what percentage of error reduction you expect, and what type of analysis improvement you expect to gain from this deployment.
Quantifying all these return of investment in your head and letting your vendor know is a good practice to make sure both of you are working towards the same goals.
- Strike a balance between cost and value
The truth of the matter is there are so many vendors out there with outrageous pricing for a financial consolidation software with every single one of them trying to justify their products as being ”robust” and ”modern”.
Look around and compare pricing as well as capabilities and remember that the most expensive does not necessarily mean the best. Majority of the time, for these software you are paying for the established brand as with many products.
Always try to strike a balance between what the software costs, what its potential ROI to your organization will be, and what capabilities it offers. Also look at the reputation of the implementation consultants you will be working closely with as they can also spell the difference between succeeding in automating financial consolidation or failing in it.
Financial Consolidation Automation is not a walk in the park and there is no sugar coating the fact it will be labor intensive.
You should expect to encounter unforeseen challenges or even resistance. This is why perseverance in accomplishing the task at hand is so important. Do not expect for everything to go as planned, instead expect bumps on the road and have a mind set that every single bump is part of the journey and it is a bump you are tasked to resolve.
Are you looking into automating financial consolidation in your company? Visit www.performancecanvas.com or email firstname.lastname@example.org and we will connect you to one of our finance consultants for a free 1 hour consultation.
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