Ask anyone, and you’ll never hear them say they look forward to financial closing. Businesses of all sizes struggle with it continuously and find it a necessary but cumbersome process.
Any finance team member can give you several horror stories on how challenging it can be to trace and make sense of individual financial transactions while being pressured with internal deadlines and overall compliance.
Finance departments struggle to complete the task quickly and on time. As high as 87% of businesses in the UK cite a lack of efficient procedures as to why financial closing continues to be a challenge.
Finance teams cannot focus on essential tasks and high-value work that will drive the business forward and achieve value because they spend so much time on the closing process.
So, how can companies ensure that the financial close and consolidation is carried out efficiently and successfully, allowing finance to focus on providing the strategic insight required for business growth?
The answer could lie in automating financial closing to drive efficiency and achieve better results.
Legacy systems are no longer sufficient for expanding operations. They offer a high risk of human error with serious implications, in addition to a lack of transparency over numbers and performance. Discrepancies can be burdensome, both financially and in terms of a company’s brand perception and the time spent addressing issues and correcting them during the closing process.
Automation is vital for efficiency. As only half of CFOs accept their numbers and 78% of finance directors are under stress to close quickly, implementing automated Record to Report (R2R) processes will ensure overall data quality, alleviate timing pressures, and reduce the number of people associated with the process.
Here are other reasons why companies should seriously consider automating the financial closing process.
It prevents errors and inconsistencies
In today’s business environment, brand reputation is critical. Of up to 88 percent of spreadsheets containing errors, automation eliminates this risk, ensuring the integrity and continued growth of a business. Furthermore, 73 percent of finance professionals consider manual, spreadsheet-intensive methodologies to be the most challenging aspect of their R2R process. As previously stated, automation reduces errors, costs, and time burdens, protects brand reputation, and aids employee retention.
It enhances visibility into financial data
With organizations looking for financial solutions that offer better security, automation addresses the need for increased visibility into the financial closing process. It can quickly spot risky areas and roadblocks that can impact the accuracy of your financial reports.
Automated financial closing also gives finance teams the legroom they need to make the necessary adjustments to correct errors before impacting the whole organization.
Leads to saved time and effort
By eliminating manual processes and implementing automation, companies can save time without sacrificing quality. The time spent preparing, reviewing, and approving tasks and activities can be reduced by up to 40%, resulting in a 40% reduction in the number of days required to close and consolidate. Furthermore, this frees up finance teams’ time to focus on important initiatives and analysis rather than re-work.
Improves business compliance
As compliance burdens keep increasing, leveraging technology for your financial close and consolidation process will guarantee that you meet compliance standards, completing all necessary data fields in their entirety and on time. Businesses can use automated R2R tools to implement an entire audit trail, requiring an internal and external audit to know process flow, preferences, and potential threats fully.
Makes for happier finance team members
Talent is increasingly vital to business success, with retention of valued employees and high performers paramount. Ensuring that procedures and processes in which they operate are fully functional and as minimally burdensome as possible will create a happier and more prolific workforce who can spend their time on value-added tasks instead of manual, everyday, and monotonous activities.
Strengthens management decision-making
66% of money managers say they don’t have time for analysis. With automation in place, technology provides an intelligent approach to maintaining accurate data, allowing the finance function to shift away from business intelligence and toward sustainable profits to propel a business to more significant growth and success. Ultimately, AI solutions empower companies to maintain sustainable development by providing the valuable insights needed to make sound decisions.
Financial Closing and Consolidation with Performance Canvas
Companies keep evolving as technology advances, reshaping the finance function’s role from just compliance to strategic counsel, delivering strong advice, and adding to business success.
The right FP&A with automation features like Performance Canvas equips organizations with the tools and capabilities needed to grow and enhance their current methods.
Embracing new tech and automating redundant tasks goes a long way to free up finance teams from tiresome tasks to focus on indispensable aspects of business financial planning and reporting.
CFOs and business leaders get the assurance of having realistic and value-rich insights that can guide how they run the business.
If you’re keen to see how PCF works in financial close and consolidation, contact our team today for a free demo.