Reimagining finance with on-demand close
As finance and accounting (F&A) becomes a strategic business partner, on-demand close is a key part of this transformation
Advanced finance teams are adopting a smart approach to transforming the traditional close process – continuous financial close is a dynamic process in which close activities are spread throughout the month. Soft close can happen any day and a formal close within two to three days. The ultimate goal is on-demand close, where finance professionals have access to real-time data to accurately close the books at any point in time.
There are four dimensions to understanding why this journey from continuous close toward on-demand close is relevant to your finance team today.
Competitive edge from insights
With companies flooded with external and internal data, access to information is no longer a competitive differentiator. Companies are now focused on shortening the data-to-insight-to-action journey, and faster close and reporting is an important step. It brings better accountability, agility, and visibility, helping financial controllers become more valuable business partners.
As people have become accustomed to the ease of using Siri, Uber, and Airbnb, finance professionals are experiencing a big divide in the way they interact with technology outside of work and then during office hours. Such innovation and customer centricity should define their workspaces, too.
Finance professionals across countries and cultures know that the run up to the financial close period means limited time for family and friends during that five-to-ten-day cycle. The cumbersome processes associated with collating and validating data, and handling exceptions, tie accountants to their desks. A faster and smoother financial close improves the work-life balance and helps retain high-performing employees.
Advancing with technology
An advanced finance function doesn't shy away from deploying new technology and supporting enterprise growth. Cloud-based solutions offer faster access to new technology while driving standardization and the adoption of best practices. And by introducing robotic automation, artificial intelligence (AI), and machine learning to accounts payable, accounts receivable, and journal entry, companies are reducing manual effort and unlocking new insights.
As they move to an on-demand close, leading organizations are making transactional and manual tasks invisible and analytical and judgmental tasks more intelligent. In record to report (R2R), there has been remarkable success in automating reconciliations and inter-company reporting streams. Soon, many of these processes will run like a utility with touchless processing. And with machine learning, computational linguistics, and computer vision, the finance function is becoming more intelligent by embedding analytics at its core.
To explore how companies are rethinking their financial close process, we ran a webinar with Victoria Hernandez, accounting and external reporting leader at Mondelēz International, one of the world's largest snack companies. When asked about top challenges, over 80% of attendees cited high work load, rework and manual effort, and lack of access to real-time data as the main challenges. Most of the respondents also agreed that their organizations lacked the financial tools and resources to achieve continuous close.
To provide accurate and timely financial information to support business leaders in decision making, we have developed a road map that addresses these challenges and transforms your financial close and reporting. But this is not a one-size-fits-all approach, as every organization needs a different mix of digital, process, policy, and industry knowledge related to the financial close.
Here are the three considerations as you embark on your financial-close-transformation journey:
The webinar hinted at promising trends: most attendees said their organizations were using automation to close the books on time. For Mondelēz International, for example, the impact has been significant on close efforts, time to report, ERP utilization, standardization, and reduction in audit hours. Transforming its R2R function has increased process standardization by over 50% and reduced finance costs by 41%, close efforts by 20%, and time to report by 30%. And it has achieved these results while still on its journey toward on-demand close.
Dedicating time and investment into enabling on-demand financial close will not only improve the work-life balance for your team of finance professionals but also enable more strategic decision making from greater data accuracy, visibility, and standardization.