How corporate finance departments can significantly improve their close processes in a cost-effective manner and achieve unforeseen benefits.
Finance professionals suffer for at least a few days of every fiscal period. Once the books are closed, the corporate finance department of every business, public or private, small or multi-national, parent or subsidiary, gear up for that periodic suffering. Nevertheless, finance professionals rev up their spreadsheets, knowing that this is a time of long hours and high pressure. Finance departments go into full mobilization, all in the name of getting those consolidated reports to management, the SEC and other government agencies. Everyone is preparing to work 14-18 hours per day for a solid week to make that deadline. Sometimes efforts require two to three people over a five-day period, others may require the forces of dozens of professionals, which may take in excess of ten days.
So finance mobilizes its tools, spreadsheets, databases in dozens of locations, manual ledger sheets and simple pencil and paper, all this to perform complex tasks of translating currencies of their subsidiaries into a common base currency in order to generate closing journal entries that conform with local accounting principles, elimination of investments and intercompany activity providing an audit trail, reporting, analyzing – and the list goes on and on. The drivers for the use of spreadsheets are easy to understand: Everyone has access to them and it typically is a cost for each employee, thus not requiring additional outlay of funds for Finance to do its job. These tools are generally not the most efficient tools for the task at hand. In fact, the use of these tools makes it inefficient for finance departments to complete this periodic ritual in a timely, effective matter. As a company grows and becomes more complex, the ability of the typical tools and processes to continue to do the job diminishes.
Published: August 2, 2011
Written By: Perficient EPM