The traditional record-to-report (R2R) process is reactive and linear, but this is changing. With data and digital as its springboards, today’s finance function aims to deliver real-time reporting and analysis―and fast.
From distributing workloads to giving exceptional visibility into the organization’s finances, the goal of an on-demand financial close is within reach.
A Journey of Continuous Improvement
Advanced finance teams have found a smart approach to transform the traditional close process to a continuous financial close, a dynamic process in which close activities are spread throughout the month. With this model, a soft close can happen any day and a formal close can be completed within two to three days.
The ultimate goal is an on-demand close, where finance professionals have access to real-time data to accurately close the books at any point in time.
The following four dimensions are critical to understanding why this journey from continuous close toward on-demand close is relevant to your finance team today.
1. Competitive Edge From Insights
With companies flooded with external and internal data, access to information is no longer a competitive differentiator. Companies are now focused on shortening the data-to-insight-to-action journey and faster close and reporting is an important step. It brings better accountability, agility, and visibility, helping financial controllers become more valuable business partners.
2. User Experience
As people have become accustomed to the ease of using Siri, Uber, and Airbnb, finance professionals are experiencing a big divide in the ways they interact with technology outside of work and during office hours. Such innovation and user-centricity should define their workspaces, too.
3. Work-Life Balance
Finance professionals across countries and cultures know that the run up to the financial close period means limited time for family and friends during that five-to-ten-day cycle.
The cumbersome processes associated with collating and validating data, and handling exceptions, tie accountants to their desks. A faster and smoother financial close improves their work-life balance and helps retain high-performing employees.
3. Advancing with Technology
An advanced finance function doesn’t shy away from deploying new technologies and supporting enterprise growth. Cloud-based solutions offer faster access to new tech while driving standardization and the adoption of best practices.
By introducing robotic automation, artificial intelligence, and machine learning to accounts payable, accounts receivable, and journal entry, companies are reducing manual effort and unlocking new insights.
For example, cloud-based accounting solutions like BlackLine help organizations automate and enhance account reconciliation, manual journals, intercompany transactions, traditional manual financial close processes, and more.
Accurate, Timely Delivery of Financial Information
Dedicating time and investment into enabling on-demand financial close will not only improve the work-life balance for your team of finance professionals but also enable more strategic decision making from greater data quality, accuracy, visibility, and standardization.
For more insights, visit Genpact. And watch for our next post on how to close faster to run your business better.
In the meantime, read this blog for five steps to create a culture of continuous improvement.