Finance transformation: Automating the financial close process

Jan 17, 2020
Jan 17, 2020
0 min. read
Management consulting Financial management

The financial close is a complex process which continues to grow in importance as chief financial officers (CFOs) face increasing pressure to deliver timely information to the market and critical information to the internal organization. A key catalyst to modernizing the financial close is emerging automation capabilities which leverage state of the art technologies and enhanced business processes to drive efficiency into all activities.

Close automation technologies, such as BlackLine and Trintech, provide a short-cycle implementation that integrates governance and control into the financial close process while eliminating manual interventions to create efficiency. Implementation provides a built-in return on investment and helps transition your financial close from transactional to analytical, enabling the finance organization to focus on strategic activities.

Improving the financial close is an evolution, and a continuous cycle. During this process, organizations pursue several outcomes to help implement a truly modernized close function: 

  • Leveraging clearly defined activities: Disorganized and often misaligned activities generate continuous monthly “fire drills” for the finance organization. Designing a structured approach which leverages clearly defined activities for completion will enable the organization to move towards a leaner, more efficient close.
  • Enhancing policies, procedures and processes: Labor-intensive and poorly defined processes often plague the close process. Developing and implementing well-defined, repeatable and sustainable processes for the completion of activities lays the foundation for a top decile close that is both fast and effective.
  • Enhancing financial controls: Controls are a common area of weakness due to companies’ heavy reliance on manual controls and poorly defined close activities, increasing the risk of reporting and regulatory issues. Organizations can reduce control risk by increasing reliance on preventive controls and proactive error correction utilizing clearly defined responsibilities and close automation technology.
  • Improving reliability on data and financial reporting: Data integrity is a constant concern which directly impacts accurate review and timely analysis of financial information. Utilizing a structured approach aligned with state of the art technology to capture, consolidate and report quality data will enable leadership to properly balance speed, accuracy and control.
  • Reducing the cycle time to close the books: Timely execution of closing activities directly impacts the availability of financial information for decision-making and value-added analysis activities. Reduced cycle times can only be achieved once the closing process is sustainable and can be effectively replicated month over month; speed and accuracy should never be considered interchangeable outcomes for the organization.
  • Increasing timely information to the business and market: CFOs are constantly faced with increasing pressure to deliver time sensitive information to both the business and market. The organization must be prepared to meet these demands by leveraging enhanced processes and technology.
  • Encouraging complete transparency and performance management (KPIs): Lack of governance and performance management allows the processes and technology which drive the close process to become antiquated, inefficient and costly. Proper governance from leadership enables the organization to continuously improve the close process and keep pace with industry-leading practices.

Close automation technology helps companies achieve desired close outcomes, providing the enhanced efficiency and insight required to make quicker and more effective business decisions.

RSM contributors

  • Gavin Backos
  • Greg Maddux