Advice and Information for Finance Professionals

How Oracle achieved the fastest close on the S&P 500, and why it matters

Guest Author

By Daniel Fortenko, Product Marketing Manager, Oracle

On March 10, 2021, Oracle announced that we had closed our books and reported Q3FY21 earnings for the third consecutive quarter in just 10 days after the period end—faster than any other S&P 500 company. Our finance teams are making strides toward an ambitious vision of a 1 day close, and ultimately, an automated close where the focus will be on touchless transactions and accounting.

A quicker close provides Oracle with the advantage of getting timely, accurate information into the hands of decision-makers to facilitate enhanced, real-time decision making and business course correction where required, as well as staying ahead of trends. Additionally, our finance employees have more time to focus on strategic projects and initiatives, such as exploring innovative business models and streamlining M&A activities. When a fully automated close is realized, financial accounts and related data will be updated in real-time, enabling instant reporting that facilitates faster and more informed business and financial decisions.

With Oracle Cloud ERP we are now filing our quarterly and annual financial statements faster than any other company in the S&P 500." – Safra Catz, CEO, Oracle

Oracle’s customers are harnessing the same powerful, single-data model cloud, that allows our finance teams to continuously enhance business processes. In the case of managing the financial close, we:

  1. Establish the right foundation with a common, unified data model, helping to ensure 100% data synchronization.
  2. Close our subledgers while monitoring enterprise-wide close status across each function and finalize outstanding sub-ledger transactions and exceptions.
  3. Consolidate our subsidiaries’ results and use the accounting hub in Oracle Cloud Financials to combine the results, eliminate intercompany activity, and translate our results to our USD reporting currency.
  4. Use Oracle Cloud EPM Narrative Reporting to review our consolidated results, performing flux analysis for both Income Statement and Balance Sheet as part of our internal management reporting procedures.
  5. Reconcile accounts from our sub-ledgers to general ledger, automatically matching, using Account Reconciliation in the cloud.
  6. Report our quarterly earnings to the SEC, our investors and to the public, all completed in 10 days following the period end.

In a recent virtual event, Maria Smith, Oracle Senior Vice President and Corporate Controller, discussed the value of closing faster than the competition.

“If you report to the street in 10 days, you’re spending the rest of your quarter on your future and on improvements,” says Maria. “We know some of our competitors report in 45 days, which means they’re spending half of the quarter on what happened in the past. And it’s not just within finance – it’s focusing on the past across the entire company.”

Staying forever modern with continuous updates

With Oracle Fusion Cloud Applications, quarterly updates help improve the close process and generate impressive results—which, for Oracle, has resulted in the following streamlined efficiencies:

  • 47% reduction in manual accounting activities (to date)
  • 96% of banking transactions automatically matched
  • 40% of balance sheet reconciliations prepared globally (to date)
  • Global intercompany tie out (1.5 hours per month)
  • Bank statements auto import functionality
  • 81% system prepared reconciliations
  • 98% reduction in global expense allocations
  • 99% reduction in global PO accruals preparation time

Paul Doyle and Anna Clare, senior finance executives at Oracle, recently highlighted a few of the updates that are powering new efficiencies in the key area of cash management/reconciliation and cash flow forecasting.

Working with our customers to drive out-performance

Because Oracle is on the same cloud applications, our customers have the opportunity to work directly with us on future updates.

“We’re spending more and more time with our customers,” says Maria. “The additional time that we spent on closing our books we now invest in sharing best practices with our customers and learning more from them. We listen to the challenges they have experienced, and, together, we brainstorm on how to fix them and make things better.”

In fact, customers have helped add hundreds of new features over the years.

“We have no customizations. All the feedback that we share with product development is also valid for every single customer,” adds Maria. “We are working together on all the ideas that will get us to a fully automated and continuous close.”

What’s next on the path to a fully automated, continuous close

Oracle’s finance team is already working on future enhancements that will bring them closer to their goal. Among the list of planned updates, are:

  • Creating an automated short-term cash flow model to further streamline and create real time visibility of our cash flow forecasting.
  • Taking advantage of predictive analytics and other features within Oracle Analytics Cloud (OAC) to better manage-by-exception.
  • Using Oracle Integration Cloud to automate repetitive tasks like cost allocations.

For more information on how Maria’s team has accelerated Oracle’s vision for a one-day close, check out the Oracle@Oracle web site.

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