When it comes to financial consolidation, CFOs always have the same overarching goal in mind: more efficient and faster closes. Reducing the length of the closing process (without sacrificing accuracy) ensures that financial reports are the most up-to-date and allows staff to focus on more productive and strategic tasks. Below are five strategies for faster financial consolidation that can be used to improve the operations of any organization.
Work Smarter, Not Harder
One of the easiest ways to “work smarter, not harder” is to let computers do as much work as possible—any part of the financial consolidation process that can be automated should be. This sounds like a no-brainer, but you’d be surprised how many companies still rely on manual processes!
ERP software is a powerful resource that can be used to automate much of the closing process, ensuring the data is transparent, accurate, and compliant. In fact, one study found that organizations using NetSuite—the world’s leading cloud-based ERP system—accelerated financial close processes by 20-50%. NetSuite helps organizations streamline the close process with capabilities to manage period-end activities and to detect and respond to problems before they escalate or occur.
Put it in action: Schedule a meeting with your organization’s accounting and finance teams to see what processes can be automated. Utilizing a third-party to conduct an unbiased assessment of how your financial operations can be further streamlined will help you align processes and thoughtfully plan, build, and utilize software to accomplish your unique goals.
Many organizations initially use Microsoft Excel for their financial records, primarily because Excel is inexpensive and can be used for keeping books. As the business grows, though, the spreadsheets do too. Over time, they become very complex and are prone to break down. Rather than spending time looking for the broken formula or incorrect cell reference, your organization’s resources will be better spent investing in financial software that will make the end-of-cycle closing processes simpler, not more complex.
Put it in action: If your company has grown but is still using (and struggling with) Microsoft Excel or QuickBooks, there may be a better option. Ask yourself these four questions to determine how an ERP system like NetSuite could help your financial consolidation efforts.
Use a Shared Calendar
Employees are typically dependent on one another’s data, each employee requiring specific information before he can begin his or her process in the overall consolidation. When working on a team, a schedule is vital to the overall success of the process. In fact, Deloitte notes inconsistent closing calendars and checklists as one of the process’s primary challenges. Using a shared calendar is an easy way to ensure all team members have access to the appropriate details, documents, and deadlines.
Put it in action: After meeting with your team to review processes and possible improvements, work backward from the consolidation deadline and assign tasks to the appropriate team member. Remember to set reminders! Make sure each team member is clear on their responsibilities. Integrating this calendar with a project management tool will give you additional capabilities in making sure the project stays on schedule.
Choose the Right Program
This final tip is perhaps the most important and will lead to the most significant improvements in your financial consolidation efforts. While all the other strategies can be done without a dedicated financial management software, efficiency will skyrocket with the right solution in place. Software, such as NetSuite, provides quick and easy access to real-time financial data from across the organization, allows you to collaborate and share with stakeholders, leverage robust analytics, ensure compliance, and more.
Put it in action: Find a partner who specializes in these types of technologies and processes to help you make the best decision for your unique organization. (If you’re reading this, you’ve already found one!)
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