Does the term “year-end close” strike fear into your heart? Is your financial close process long, drawn-out, and enormously frustrating for everyone involved? Do you worry that the numbers you’re producing at year-end close aren’t accurate?
If the answer to any of those questions is “yes,” it’s time for a change. The financial close process doesn’t have to be something you dread. Read on to learn how to make your financial close process smoother and easier by utilizing financial performance management solutions.
What Are Some Year-End Close Problems Companies Face?
In 2014, CFO Magazine published an article stating that the ideal financial close should take approximately 10 days. It dubbed any close that takes longer than 20 days to be “competitively worrisome.” Research from advisory firm APQC showed that businesses that were able to close in less than 10 days spent 50 percent less on the process than their slower-to-close peers.
The reason the financial close process takes so long at many companies is that it’s a highly manual, error-ridden process. Firms rely upon multiple versions of static spreadsheets to transmit financial data. That makes it difficult to collect and consolidate data in an accurate and efficient manner.
In addition, data can be in silos across the company. The finance department was promised that ERP systems would break down silos, but if the ERP system is not fully integrated with applications outside the finance department, it can be unnecessarily complicated, costly, and time-consuming to achieve accurate accounting.
What is Financial Performance Management and How Can it Improve Your Financial Close?
Financial performance management solutions provide a single platform for reporting, planning, and analytics. They’re designed to be used by all business users, not just those with technical knowledge or data analysts. Moreover, they work in real time and draw the most up-to-date information from your business systems.
How do financial performance management solutions make your financial close faster and smoother? Instead of spending weeks sending spreadsheets back and forth between departments, you can access the information you need at a click of a button. There are no more competing versions of truth: You can trust that the numbers you have are correct and accurate. In addition, a financial performance solution allows you to customize reports without the aid of the IT department. This saves time and energy for all involved so your financial close process is shorter and less costly.
Previous year-end close processes might have been frantic or headache-inducing, but they don’t have to be that way going forward. Implementing the right solutions shortens the process of closing your books at year-end, reduces your stress, and costs you less money.