For finance and accounting professionals, there are three words in the English language that induce headaches and in some cases, outright panic: “year-end close.”
At medium to large companies, you could be looking at many different spreadsheets with data sourced from various financial applications, and you have no idea how accurate those numbers are or whether you’ve got the latest version.
Year-end close shouldn’t strike fear into your heart, though. Read on to learn how to accelerate the year-end close process, ensure the quality of your financial statements, and how to easily share information with internal and external stakeholders, and comply with regulatory requirements. You’ll also learn about the steps one company took to transform its financial close and reporting process into a smooth and painless procedure.
High-Quality Data: The Linchpin to a Smoother Financial Close
The biggest obstacle to accurate financial reporting is not having a single source for reliable financial results. Usually, this hurdle arises because companies depend on spreadsheets to collect and store this data.
Spreadsheets have two major benefits: they’re simple to use and they perform a variety of functions. That being said, they’re not an appropriate solution for enterprise accounting or financial reporting. The biggest problem with spreadsheets is that they’re not designed for security and control of a corporate process – there could be several versions of the same spreadsheet, but how do you know which numbers accurately reflect the latest financial results? When you try to combine the figures from multiple tabs into a single worksheet, you might accidentally omit some, or introduce errors, which further affects reliability.
Instead of using spreadsheets, many organization are switching to cloud-based EPM software with robust consolidation and reporting capabilities. These systems are designed to automatically load data from multiple general ledgers (GL) and other sources – both on-premises and in the cloud. You and your staff don’t have to worry about which information is correct and/or up-to-date anymore. And a nice bonus is that many cloud-based EPM solutions allow users to continue using Excel as a front-end for data entry, reporting and analysis.
Sharing Financial Reports with Stakeholders: It Doesn’t Have to Be a Headache
Finance executives need to provide reliable, transparent financial results to your internal and external stakeholders. Even before the advent of regulations such as Sarbanes-Oxley, internal stakeholders (such as other C-suite members) and external stakeholders (such as shareholders) expected to receive timely, accurate financial reports. And in many cases, you must provide this information in less time and with fewer resources than ever before.
Your company’s year-end close process has a significant impact on the finance or accounting department’s ability to deliver credible financial reports. Organizations that are able to close the books in 5 days or less, gain a big advantage over those who take much longer, allowing them more time for analysis and delivering more accurate financial results, faster.
When finance can’t produce timely and accurate financial results, both internal and external stakeholders will lack confidence in the business. Cloud-based EPM software not only allows finance staff to generate financial reports faster, it lets you package information in a variety of ways that make it easy for all stakeholders to understand data. This includes standard financial statements, packages of reports for management, as well a board books and presentations that include text, charts, and graphs.
Regulatory Compliance: Yes, It Can Be Easy
In addition to satisfying internal and external stakeholder information needs, businesses are required to meet regulatory requirements (such as the aforementioned Sarbanes-Oxley). That can be challenging, as regulations continue to evolve.
Keeping up with changing regulations in your own jurisdiction can be tough enough – what if you’re in the finance or accounting department of a large, multinational corporation? When you don’t meet regulatory requirements, government agencies can penalize you financially. Executives might even face criminal charges.
Again, cloud-based EPM software provides the solution to this problem. It can automatically create regulatory filings, in many cases for multiple jurisdictions. This saves time as well as hassle for you and your team.
Golden State Foods: A Cloud-Based EPM Use Case
Golden State Foods is a privately held food manufacturer and distributor based in Irvine, CA. It’s one of the largest diversified suppliers to the food industry, servicing approximately 125,000 restaurants in more than 60 countries. Golden State Foods has 50 locations on five continents.
After completing a round of acquisitions, Brad Tingey, Golden State Foods’ corporate controller, realized that it was time to consolidate the company’s finances – the accounting department was using spreadsheets for financial consolidation and reporting. The spreadsheet approach was no longer appropriate to handle the financial reporting needs of such a large company, and Tingey turned to Planful for a solution.
Golden Gate Foods implemented Planful’ cloud-based EPM software that consolidated reporting across multiple ERP systems and multiple currencies, and handles complexities such as intercompany eliminations, and minority-owned subsidiaries. Thanks to Planful, Tingey says that the year-end close process has gone from being long and frustrating to one that is smooth and quick as a result of automation. Data is more accessible, comprehensive, and transparent, and stakeholders receive accurate information faster than ever before.
Tingey and his team chose Planful because the firm’s solution gave his department control over reporting. Moreover, Planful’ cloud solution delivered the speed-to-value that Golden State Foods sought. In fact, Tingey would like to expand the use of Planful’ solutions for his business’ planning needs.
Cloud-based technology has transformed the year-end close process. It no longer has to be a source of dread for you and your team. To learn more about how you can make your financial close a painless process, watch and listen to the webinar Managing the Complexity of the Financial Close.