By Paul Doyle, Senior Finance Director, Finance Transformation and Automation, Oracle and Anna Clare, Senior Manager, Record-to-Report Cash & Systems, Oracle
One of our more ambitious goals here at Oracle is to fully automate our monthly financial close. We want to achieve instant updates to financial accounts and data for immediate reporting. Quarter after quarter, we’ve significantly accelerated the close process, helping our leaders to respond rapidly to changing business and economic conditions, and giving our finance team more time to focus on strategic activities.
The quarterly updates in Oracle Cloud Applications have been a huge advantage. Every quarter, we can take advantage of new enhancements, adopting and benefiting from the latest product innovations—bringing us closer to a fully-automated close. In November 2019, one of Oracle’s subsidiaries (which itself has 20+ subsidiaries globally) closed its books in a single day for the first time. We are now using this major achievement as a benchmark to automate the close in all Oracle subsidiaries. Most recently, we closed our corporate books and reported Q1FY21 earnings on September 10, 2020 in just 10 days, all while everyone was working remotely due to the COVID-19 pandemic.
Here are some of the features in the latest quarterly update that are powering new efficiencies.
Since migrating our finance systems to Oracle Fusion Cloud ERP, we’ve used standard functionality to automatically process and reconcile bank statements, minimizing manual intervention from our finance team and streamlining financial close activities. This is no small achievement. Oracle works with a large number of banks, and we process about 720 daily bank statements and 200 additional monthly statements. But up until recently, if a payment was rejected, the rejected line would remain unreconciled, and the team would have to do the work manually. This quarter, using new updates in Oracle Cloud ERP, we’ve adopted a new feature that automatically reconciles payment rejections on bank statements, saving valuable employee time.
As a large organization, Oracle processes a lot of payments. In some cases, we issue one accounts payable (AP) batch payment per day, which can include 100–400 individual payment documents.
Historically, if just one of these payment documents were rejected or returned, Oracle’s cash management team would have to manually un-reconcile and re-reconcile all of the line items in the batch for AP to process the payment correctly.
Now, we’ve adopted an update that helps our finance team identify and un-reconcile a single returned payment, without adjusting the other hundreds of payments in a batch—creating significant efficiencies and time savings throughout the quarter leading up to close.
Thanks to another Oracle Cloud ERP update, employees can now view and reconcile journal entries even if the CCID (the bank account identifier) doesn’t match the intercompany codes used in the original bank account setup. Previously, the cash management team could only view journal entries that exactly matched the original CCID bank account setup. This caused other inefficiencies because users could not clear these bank lines in the system. Now, employees can view and reconcile all journal entries in the system, and can set up rules to auto-reconcile. We anticipate that this update will bring us closer to a 1-day close.
We process a large number of external transactions: transactions that need to be accounted for as they originate from the bank, such as bank charges, interest, or sweeps. In the past, our system automatically assigned treasury exchange rates to any external transaction made in a foreign currency. This caused inefficiencies during reconciliation when bank statement transactions were recorded in a different exchange rate (for example the corporate rate).
When this happened, employees had to manually create another transaction and calculate the difference in exchange rates to reconcile the external transaction to the original bank statement. Now, with a new feature in Oracle’s quarterly cloud updates, employees save valuable time by choosing which currency rate to use in each external transaction, so they can reconcile with the bank statement more efficiently.
A new update in Oracle Cloud ERP makes it easy to save and re-apply frequently-used search criteria on the “Inquire on Detail Balances” page (see figure 1). This helps employees retrieve account balances faster and more efficiently. With this enhanced user experience, the finance team can access the information they need, when it’s needed, without having to re-create common queries.
With Oracle Cloud ERP, we implement useful enhancements like these every 90 days, improving the financial close process and generating significant efficiencies. We can:
In the months following the work-from-home mandate, Oracle executive vice president Corey West said it best: “The pandemic has highlighted the importance of a cloud-based platform that supports business continuity and resiliency. For finance, this means taking advantage of quarterly innovation so we can close the books faster while working from home and deliver real-time information to management for immediate decision making. Our goal is to reach a one-day close, and we’ve been able to shave more than a day off our close since the pandemic began. We’re also embracing automation relentlessly, driving towards what I call infinite scale, eliminating human intervention when possible, to free up more time to focus on making smarter decisions and delighting our internal and external customers.”
As we continue to automate manual processes across the organization, Oracle’s finance team will be able to spend more time partnering with the business to ensure success.