Finance executives are facing more pressure for faster reporting and more reliable financial close capabilities. However, many organizations continue to use outdated business applications for financial close, consolidation and reporting. Some of them even use Excel spreadsheets to execute, monitor, and track financial processes. Traditionally, financial close and reporting processes have been fragmented, often involving manual effort and many disconnected spreadsheets. This resulted in human errors and time-consuming iterations. It also meant that organizations didn’t have a readily accessible, centralized view to provide timely financial results and business insights into the financial close process.
Therefore, organizations are now turning to solutions like Oracle Financials Cloud and Oracle AI Apps for ERP. Oracle Financials Cloud offers a broad suite of modules and capabilities designed to empower modern finance with streamlined processes, increased productivity, and improved business decisions. Oracle AI Apps for ERP is a suite of AI and data-driven features that help the procurement and finance teams improve financial performance, optimize cash flow, and increase agility across payables, receivables, procurement, and inventory.
Here are some of the best practices you can follow to modernize your organization’s financial close process:
Build A Financial Close Strategy
The main reason for complexities in the financial close process is the lack of a comprehensive, structured, and tailored strategy that starts with a focused assessment of key issues and gaps. Standard procedures and checklists are vital for speed and accuracy.
Increasing efficiency requires you to document and track the entire month-end close process. It’s impossible to automate processes without a clear understanding of dependencies, task duration, and more. Each task needs to be thoroughly assessed as to its value and reason during the financial close process. This will help in understanding key processes, and in reengineering these processes wherever possible by applying lean methodologies and intelligent process automation (IPA).
Automate Time-Consuming Tasks
Data integrity and speed improve as manual processes such as spreadsheets are replaced with automation. Look to the system to see if it will solve the problem rather than just developing yet another spreadsheet. Modern SaaS financial close applications offer automation capabilities powered by pattern recognition, artificial intelligence, and machine learning – eliminating routine finance and accounting tasks in the office. IPA can automate most of the tasks that make the financial close process so hectic:
- Automatically perform up to 80% of simple account reconciliations
- Automatically track the status of task completion across multiple systems
- Automatically kick off close processes as soon as dependent tasks are completed
- Update the close calendar so you can stay apprised of where you are in the financial close process
Deliver Access To Real-Time Data
Many finance teams only have access to accurate data at the end of the month, resulting in the last-minute huddle to feed data into the systems that execute the financial close process. Access to real-time data can shorten financial close cycle times and allow you to make faster decisions.
Start by isolating processes that tend to happen once a month, only during the close. While there are often tasks that occur later in the close, it’s possible to push many of them earlier in the close cycle, while also increasing their frequency. Financial reporting can be done faster if many financial close tasks such as journal entries, reconciliations, etc. aren’t crammed into the close cycle. It is beneficial to process them as they happen in real-time rather than simply leaving them to month-end. From a technology standpoint, it’s difficult to deliver real-time information with disparate systems, which is where standardization comes into play. Real-time accounting is made possible by embedding digital technologies into standardized processes.
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