Automated Financial Consolidation: A Must-Have
Many multi-dimensional organizations dread the arduous and inevitable task of closing the monthly, quarterly, and year-end books. They face complexities associated with numerous business units and profit centers. In addition to disparate computer systems, methods, and charts of accounts, many have offices in different countries with their own currencies and regulatory requirements. Unless you've integrated and automated the consolidation process, your organization is likely frustrated with the inefficiencies, inaccuracies, and even risks inherent in manual roll-ups.
Integrating financial applications across the enterprise doesn't require that your business units abandon legacy systems and migrate to a common platform — as long as you invest in the right consolidation technology and implementation expertise. And the advantages of consolidating and analyzing financial data from numerous entities in real time are significant. We'll highlight a few here:
- Reduced time and cost: Manual consolidations entail a lot of wasted time and hidden costs due to shadow systems and extra processes. For example, manually consolidating and closing its quarterly books took one nine-unit organization we worked with more than 70 days, versus the 3 to 10 days it typically takes for world-class organizations. Consolidation applications not only save significant time and resources, they enable public companies to easily meet the shortened reporting deadlines required in new filing regulations.
- Improved consistency and accuracy: By automating manual functions as well as checks and balances, consolidation technology dramatically reduces errors and miscommunication. It also enables you to drill down into questionable line items as well as create process documentation and audit trails, giving you improved confidence. These features translate into a reliable and accurate view of the enterprise's financial state, regardless of the timeframe, the special circumstances, or the differences in operating units' accounting structures and staffs. In addition, public companies can clearly demonstrate that they're in compliance with shareholder expectations as well as Sarbanes-Oxley and other regulatory mandates.
- Improved analytics and strategic decision making: Consolidation technology creates a financial repository to support management's strategy implementation and varying reporting requirements. In addition, you can pull in data from an Enterprise Performance Management suite to aid in preliminary reporting as well as incorporate external data for benchmarking and performance checking. Equally important, financial consolidation applications dramatically streamline the budgeting process. This enables management to spend less time on collecting and assimilating various financial and numerical data and more time on building plans that respond to changing market dynamics and support the organizational strategy.
Certainly, it makes very good sense for complex organizations to automate the consolidation of financials. But, be prepared to address the potential challenges that could hinder your success. You're more likely to succeed with an experienced and objective partner at your side. One who can balance the business and technical issues. One who has successfully optimized processes as well as navigated political landmines, internal sensitivities, and external sources. One who can bring best-practice and change management expertise to the endeavor.
CherryRoad has all the expertise you need to succeed. To learn more about how we can help you implement and benefit from a financial consolidation application, contact us at info@cherryroad.com.
