By Maria Smith, Senior Vice President, Assistant Corporate Controller, Oracle
Think about the positive impact on your team and across lines of business of a monthly close that would take one day instead of one week—one-fifth of the time. Think about all that additional time your team would have to focus on post-submission analytical reporting and other, higher-value accounting and finance activities.
Better yet, what if the close became touchless and fully automated because data flowed automatically from transactions to ledgers all the time, continuously? With a live record of accounts always available, the timing of the close would become irrelevant. Information and financial data could be reported at any time.
Oracle’s finance team is working to achieve both of these visions, and in the process, we are demonstrating the new technological capabilities that are possible with Oracle ERP Cloud. We know that the ultimate vision—an always-working-in-the-background, automated close—is further down the road. But in the short term, we are realizing how cloud has the potential to transform accounting and finance for every organization.
We have already achieved significant efficiencies and benefits by moving our ERP to the cloud:
Oracle benefits when we can achieve new simplified and standardized best practices with our own technology, but our aim also is to bring those best practices to our customers. That’s why the internal cloud team works closely with our customer collaboration team and ERP product development team. Also, we share our experiences at global events, conferences and other forums and with the larger community of global finance leaders.
Oracle is the perfect testing ground to demonstrate the cloud’s potential for enterprise finance in a highly automated, high-transaction, highly connected environment. All of our sub-ledgers are integrated with data flows coming from all areas of the enterprise. And as a large company with extensive global reach, we have a lot of opportunity to use the technology and demonstrate new possibilities for global businesses.
Evolving from a five-day close to a one-day close is one of our team’s current key focus areas. Right now, we are working to understand how to achieve this goal, and along the way we have uncovered exciting and powerful new ERP Cloud capabilities.
One notable capability is the multi-ledger, multi-currency journal entry functionality. This is an amazing feature available in Oracle ERP Cloud right now—one that can drive huge accounting process efficiencies for global companies. Here’s what it has done for us:
Oracle has hundreds of legal entities and hundreds of company codes globally. With on-premise ERP, we had to do accounting journal entries ledger-by-ledger because there was no way to post into multiple ledgers and account for different currencies. If we were accounting for, say, building-maintenance costs across our company, we would have to account for these in each individual country and company code. Now with ERP Cloud we can account for all entities in all countries in one journal entry across multiple ledgers and multiple currencies.
Another key, closely-related efficiency benefit has been in our expense allocation process. Since moving to ERP Cloud, we have reduced our expense allocations, such as facilities-related allocations, from 11,400 allocations to 400; similar to the multi-ledger, multi-currency journals process, we now leverage the ERP Cloud technology to move from country-specific allocations to global standard allocations.
As a leader, I can testify that as team members free up time by automating mundane tasks, it incentivizes them to automate even more and reinforces a culture of continuous improvement and operational excellence. It’s a beneficial cycle of acceleration and momentum that we think will become the norm for finance teams as more companies adopt cloud technologies.
Also, a new responsibility for the CFO role is getting closer to the front-end of data input and transactional workflows. That is, CFOs and other leaders will need to be working side-by-side with lines of business to ensure data accuracy as it enters the business and financial systems. This quality-control responsibility will be exciting new territory and incredibly important, particularly as more automation is added downstream.
Finance leaders and teams have always been the gatekeepers of the most valuable corporate data, and they still will be. But now all that relevant data—even contextual data from outside the enterprise—is even more valuable, and volumes of pertinent data are exploding. Finance needs to provide insight early, with relevant global data to enable good decision-making. Finance needs to be strategic, working in the front office and helping their companies automate and become digital in a time of business disruption.
Automation will help with this transition by freeing up massive time and people resources required for auditing and closing and reinvesting in innovation for the future success of their business.
That’s why we have made an automated close our guiding vision as we continue our cloud journey. Our team is excited about the changes we are making and will continue to share our achievements with you.