3 Ways Technology Is Hurting Your Financial Close Process
Is your financial close process run by institutional memory?
People with knowledge and a background in the close process are able to execute its procedures on the basis of their expertise, regardless of whether the complexities of the close process are creating burdens and inefficiencies that those leaders aren’t able to get under control.
Compared to that antiquated scenario, the adoption of any financial close software would seem to be a massive improvement. And although it often is, software alone doesn’t solve all of an organization’s problems. In fact, the adoption of new technology can actually help mask some of the limitations and challenges placed on the financial close process by technology itself.
When you’re adopting financial close technology within your organization, you should also address some of the technological limitations—including data visibility issues and a lack of customization—that put a ceiling on your financial close performance. Here are three common problems to keep an eye on in the financial close process.
1. Your close platform doesn’t account for unique processes and needs.
Rigid technology doesn’t work for organizations in need of specialized platforms and workflows to serve their entire close process. To some extent, it’s easy to understand why CFOs and other business leaders would be leery of adopting technology if it can’t address all of their needs. In that case, the benefits of an automated financial close solution can be wiped out by the disruption and inefficiencies forced on the organization through inflexible technology.
The solution to this pain point is simple: To fully support the financial close process, and leverage automation to the greatest extent possible, CFOs need access to software that can be customized to serve their specific processes and needs, minimizing disruption and enabling greater gains in productivity—which also enables a financial close process that offers much greater value.
2. You face an internal lack of alignment over the management and use of financial statements.
Financial statements play an important strategic role in large organizations, but the management of these financial statements often isn’t aligned with the needs of the organization. The management of these financial statements requires the consolidation of company-wide data through a flexible system that automates data management, supporting a faster time to close.
Consolidated financial statements are possible only when full data transparency is achieved throughout the organization. Meanwhile, the consolidation system needs to account for different integrations and workflow stages that may differ from the standard approach.
If you aren’t able to build a consolidation system that manages data comprehensively, it will impact the quality and value of your financial statements, hurting the organization at a strategic level.
3. Financial statements aren’t delivered on a schedule that matches your internal needs.
Automated data consolidation doesn’t just streamline time-consuming processes, enabling a faster time to close. It also provides more detailed, up-to-date reports that financial leaders can use to make key business decisions.
Too often, close technology forces businesses to stick to predetermined reporting schedules that don’t necessarily align with their own financial calendars. In some cases, the financial reporting systems used by organizations establish report cutoffs at unusual dates that don’t serve the goal of gathering information about company-wide financial performance.
Businesses should seek out solutions that offer greater control of these schedules, resulting in statements and reports that are available at the right time, and based on information covering the most relevant time frame.
Each company’s financial department faces unique challenges in collecting, managing, and interpreting financial data. Specialized needs require the right financial close software.
Longview Close offers the customizable features that CFOs need to improve their internal operations and accelerate their time to close. Learn more about Longview Close.