By Jennifer Toomey
“I’d love to have everything touchless and close the books in one day, so that we can use the commodity of our people to do what they were hired to do.”
— Lisa Blackwood-Kapral, Chief Accounting Officer, Lyft
Lyft shares how the ride-sharing giant is accelerating an automated close using a full suite of cloud ERP and EPM apps to deliver greater transparency and insight, strengthen control and compliance, and enable the move to touchless transactions.
The above quote is one of my favorite from the Oracle Cloud ERP Virtual Summit. I love it because it’s visionary and ambitious. A touchless close, in one day? It sounds too good to be true. Yet it’s exactly the goal that leading finance teams are aiming for, month by month, step by step.
Learn from Oracle Corporate Controller Maria Smith how finance automation and a unified cloud platform have accelerated Oracle’s vision for a one-day close.
As companies contemplate their next big move—from embracing new business models, to capitalizing on acquisitions or divestitures—they can’t afford to be slowed down by manual processes and inaccuracies. An automated close that connects stakeholders and systems is critical for getting timely, accurate information into the hands of decision-makers.
With that in mind, let’s look at 5 best practices that can help speed your journey to an automated financial close.
Best practice #1: Address the extended financial close process
It’s important to address the “extended” financial close, which can include the subledger close, identifying irregularities and errors, account reconciliation, tax provision, and submitting filings to the appropriate regulatory body. It’s impossible to improve and automate the financial close process without a clear understanding of dependencies and task durations.
Best practice #2: Focus on key improvements to streamline and connect
Once the entire close process is understood and documented, finance can focus on the areas that can be simplified, standardized, and connected. Consider areas where there are repetitive or lengthy tasks, such as intercompany eliminations, account reconciliation, cash flow, foreign exchange, and minority interest.
Best practice #3: Create a shared, detailed close schedule
It’s critical to share and track the close process anytime. Visible dashboards, often delivered as part of cloud solutions, help improve collaboration and provide timelines. Visibility and predictability are crucial to executives and stakeholders.
Best practice #4: Use intelligent process automation (IPA) and machine learning to improve the extended close
IPA can significantly improve many tasks in accounting and finance that are currently manual, such as account reconciliations, financial close process management, and statutory reporting. IPA is considered the next evolution in robotic process automation (RPA). It layers in artificial intelligence; can observe and analyze data, its history, and its context; can identify new patterns or recommend new rules; suggests how existing rules can be reconfigured to be more efficient—and then applies human judgment.
IPA can also help automate much of the close orchestration and track the status of task completion across multiple systems, automatically kick off close processes as soon as dependent tasks are completed, and update the close calendar so you can stay apprised of where you are in the financial close process.
Best practice #5: Provide timely, self-service reporting
Getting timely and accurate information to decision-makers is really the ultimate objective. It’s a best practice to deliver flash and automated reporting in a self-service system where users have secure, remote, 24/7 access. Decision-makers will appreciate the interactive dashboards and the ability to get information ad-hoc. Finally, take a collaborative approach so contributors can provide commentary and see the progress of financial and management report packages.
Some final tips
Look for areas where there are constant delays and figure out why. Are there constant system kick-outs due to improperly mapped transactions? Are there task dependencies that rely on one person or where dependencies are not clearly managed? Areas with extremely manual or error-prone tasks (such as importing or exporting data via spreadsheets) could be improved with integration or enterprise data management (EDM) solutions.
An automated and connected financial close can help finance teams provide faster, more accurate, and more transparent reporting.
Companies with an automated close instill confidence in their employees, customers, and investors. Ultimately, a streamlined process can help companies focus their time on strategic analysis to find new growth opportunities such as shifting or creating new business models or making acquisitions or divestitures.