Businesses are under intense pressure to manage the financial consolidation process in a timely and efficient manner. But depending on your industry, you may be tasked with meeting the standards of multiple regulatory bodies at once, some of which can span domestic and international markets.
Regulatory bodies aren’t the only entities with an interest in financial consolidation. This process is also essential to providing stakeholders and investors with better information and disclosures about the state of the organization.
Among the challenges businesses face in meeting these objectives are streamlining the financial close process, integrating sets of financial data without compromising the accuracy of those data, ensuring visibility of the consolidation and close process, and managing costs to remain within budget.
To meet these ever-growing demands, businesses are turning to automation solutions that facilitate faster, more efficient financial consolidation.
Specialized Tools for Consolidation Process Improvement
Excel spreadsheets are a foundational tool used throughout the business world, included by finance teams tasked with managing the consolidation process. But spreadsheets weren’t designed to support workflows.
Spreadsheets may have filled an important gap for organizing data, for a time, but there are transformative software solutions available to provide better functionality and support to businesses of any size.
Although Excel remains one of the standard software solutions used for finance and accounting practices, its dominance is on the decline. In 2018, the number of US companies using Excel spreadsheets as their primary budgeting and accounting tool declined by nearly nine percent. Among small businesses, spreadsheet usage declined by nearly 12 percent as those companies were won over by the potential enhancements offers by financial reporting automation.
Tools that were built for your tax team’s specific needs are a benefit to regulatory bodies, stakeholders, and employees, all at the same time.
Here’s how these corporate financial software solutions can upgrade your current consolidation process workflow.
Automating Your Consolidation Process Workflow
Take a minute to think about all of the different workflows you have for your consolidation process. You have different team members in the office of the CFO and other departments all managing different data. You have processes for creating month-end, quarter-end, and year-end consolidated financial statements.
There are specialized tools that can help you standardize and document these processes. There are others, like Longview Close, that can take it one step further and automate your consolidation process flow steps, tasks, notifications, and approvals.
Automating your workflow for closing financial statements can improve your team’s efficiency and accountability because each step is clearly mapped with dependencies, notes, reminders, and more.
This automation can also help you with onboarding new employees and training them on your process, which is critical for growing organizations.
Real-Time Data Consolidation
Outside of automating the tasks that must be completed by your team, you can also improve your close process by using technology that smartly automates your consolidation calculations. Imagine having the data you enter auto-update all corresponding data points in real time across various regions and time zones, without manual intervention, as easy as a click of a button.
Batch consolidation projects may be a logical approach to project management for human financial professionals, but this approach is inefficient on a macro level and inevitably lengthens the amount of time required to complete the financial close.
Automation solutions can consolidate this data in real time, updating and organizing data as it enters the system. With a real-time solution in place, data and resulting financial statements can be ready for review shortly after all of the required data has been received, minimizing the time required to close.
Each time data is entered by hand into a spreadsheet, new opportunities are created for inaccuracies that disrupt financial consolidation. Even in the best-case scenario, this creates additional costs for organizations, in addition to slowing down workflows.
Automated consolidation, by contrast, is more reliable and doesn’t create the risk of data being miscopied from its source. As information is consolidated with an effective zero percent error rate, employees previously tasked with this job can instead devote their time and resources to validating the data, improving the quality of data sets.
Increased Time for Analysis, Validation, and Strategy
Many aspects of financial consolidation are a poor use of human capital. Thanks to today’s technology, the time demands of this process can be avoided altogether.
When you relieve your team of tedious tasks and hand them off to an intelligent automation solution, your human workforce can allocate its resources to analyzing consolidated data sets, validating data and reports, and helping shape financial or business strategies to improve performance in the future.
Tax data and financial analytics provide benefits that extend far beyond a single financial consolidation cycle, generating insights to improve practices going forward, both for financial teams and for the company’s larger operations.
Investments in better financial technologies don’t just simplify life for your financial professionals. They increase productivity, reduce errors, and ultimately impact your organization’s bottom line.
In the financial world, automation tools streamline tasks and even help you attract better talent for your financial team. With such comprehensive benefits, businesses should lean into financial reporting automation tools as an easy solution for a host of corporate reporting challenges.