With the right tools and processes in place, the year-end close and reporting process can be less stressful and painful for the Finance team, maybe – dare I say it – even something you look forward to.
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Remembering the Good Old Days
When I was a staff accountant back in the mid-1980s, I remember spending many nights and weekends working to close the year-end books. When we’d arrive at the office on Monday morning after a long weekend of work, the Finance department floor would be littered with empty pizza boxes, donut boxes, coffee cups, and even a few empty beer cans. Ah, the memories!
Of course, the technology we were using to collect and consolidate financial results back then was pretty arcane. My company’s international subsidiaries would send their trial balances via Facsimile. (Yes, remember Fax machines?) Half of the time the numbers were unreadable, so we had to confirm them via phone.
Then we would key the numbers into a spreadsheet and perform the currency translations there. (I think we used Lotus 123.) Then we would create journal entries and post the changes to the mainframe GL for consolidation. Intercompany reconciliations were a nightmare, with many phone calls to the foreign subs. Running reports was an overnight, batch process – night after night.
Life is so much easier for accounting and Finance staff now with today’s technology. But year-end close and reporting can still be challenging. Why?
Those who do this for a living know how challenging the process can be and what the complexities are. The financial close is an iterative process that typically requires many steps:
Of course, if the accounting team is doing all of this with spreadsheets and email, especially in a multi-entity enterprise, the process can be almost impossible. Collecting and consolidating multiple spreadsheets creates too many opportunities for errors and omissions. This approach adds a lot of time and manual effort to the process. And when the auditors review the process? They’ll conclude that there’s a total lack of security, control, and audit trails when using spreadsheets.
Managing the process with legacy, on-premises EPM applications is a little better approach. But if your EPM tools are old, cannot easily integrate all the necessary data, have limited dimensionality, and inflexible reporting, the Finance team will still struggle. A lot of Finance team time and resources will be spent manually entering data, reconciling balances, manually creating reports, and dragging out the process.
And, in some cases, the installation and implementation of on-premises EPM applications can take 6 months to a year. The maintenance can also be time-consuming. And upgrades? They’re almost as costly and complex as the initial implementation. We can do better than this.
Enter cloud-based EPM software. The financial close and consolidation modules provided by cloud-based EPM providers, such as Planful, make the year-end close and reporting process much less painful. Some of the key features that make the process smoother include the following:
All of this is backed up by robust security and audit trails that enable both internal and external auditors to trace individual numbers on the balance sheet or income statement – back to their source – within minutes. This saves a lot of time, effort, and cost during, as well as after, the close process is completed.
Cloud-based EPM software also provides a number of added benefits over on-premises solutions. For example, the applications can be deployed much faster, are a fraction of the cost, are updated automatically, are more secure, and more scalable than on-premises alternatives.
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