18
How to improve financial close and reconciliation management Moving towards the utopian close

How to improve financial close and reconciliation management

  • View
    2.545

  • Download
    4

Embed Size (px)

DESCRIPTION

Using new technology, you can now perform your financial close tasks faster while delivering more accurate and valuable information. However, software by itself will not solve problems in your company’s financial close and reporting processes. Governance and business processes have to be re-designed and training and education programs are likely required. To learn how to work with the four key dimensions of the financial close – people, process, governance and technology – view and share our presentation.

Citation preview

Page 1: How to improve financial close and reconciliation management

How to improve financial close and reconciliation management

Moving towards the utopian close

Page 2: How to improve financial close and reconciliation management

Initiatives utilizing new technology can make your organization’s financial close and reconciliation processes be more efficient, accurate and informative.

What?

Page 3: How to improve financial close and reconciliation management

1. Reconciliation automation from transaction source to reporting line

2. Close management and workflow capabilities, including:• Electronic management of close tasks and schedule• Variance analysis• Manual journal entries• Financial controls

What does financial close and reconciliation management technology provide?

Reporting line reconciliation

Account balancereconciliation

Source / feeder / external files

Financial /regulatory reporting

Transactionreconciliation

Sub ledger GL/ERP Consolidated ledger

Page 4: How to improve financial close and reconciliation management

By taking on these initiatives, Gartner sees a 25% reduction in close management process costs and up to 20% in reconciliation management.

Cost savings

Source: CFO Advisory: Last Mile of Finance; Finance and Economics – Gartner (April 2012)

Page 5: How to improve financial close and reconciliation management

Streamlining the financial close can help mitigate the operational risks associated with running decentralized teams, managing disparate systems and relying on manual processes and spreadsheets.

Risk reduction

Page 6: How to improve financial close and reconciliation management

Installing software will not solve all your close and reconciliation management problems. It also requires governance and process re-design, as well as training and education.

How?

Page 7: How to improve financial close and reconciliation management

Deloitte recommends a four-dimensional close and reconciliation management framework to help carefully plan and execute this implementation work.

Technology

Govern

ance

People

Process

Page 8: How to improve financial close and reconciliation management

• Clearly defined accountability framework • Training material made available policy and procedure,

templates and tools)• Global/regional close champions• Appropriate segregation of duties (e.g. separate

individuals for reconciling accounts and correcting errors identified during the reconciliation process)

Leading practices

People

People

Page 9: How to improve financial close and reconciliation management

• Aligns resource time with high-value activities to effectively use people’s talents

• Focuses on analytics and resolving issues rather than reconciliation mechanics and volume

• Increases accountability and transparency of the process• Reduces long hours and increased stress levels

around period close•

Benefits

People

People

Page 10: How to improve financial close and reconciliation management

• Centralized/visible close schedule• Standardized reconciliation policies and risk based

approach to performing reconciliations• Clearly defined escalation, resolution and approval process• Central visibility to reconciliations and variance

explanations• Controlled and transparent intercompany accounting• Accounts adjusted and reconciled during month

as opposed to after the close•

Leading practices

Process

Process

Page 11: How to improve financial close and reconciliation management

• Reduces manual processes and increases levels of automation

• Improves process consistency to create efficiency and remove errors

• Uses risk-based reconciliation workflow to focus effort in the right places

• Reduces processing time and audit cost by ensuring availability of all supporting documentation

Benefits

Process

Proce

ss

Page 12: How to improve financial close and reconciliation management

• Greater management oversight • Prioritize accounts and deploy resources effectively

throughout the close process • Clearly defined reconciliation process to minimize

risk of error• Ability to establish, enforce and maintain standard

policies and procedures • Active use of dashboards to track close tasks,

variances and reconciliations•

Leading practices

Governance

Governance

Page 13: How to improve financial close and reconciliation management

• Increases overall accountability and transparency• Enhances risk management capabilities• Uses technology to enforce segregation between preparers

and reviewers• Improves your ability to comply with laws and regulations•

Benefits

Governance

Govern

ance

Page 14: How to improve financial close and reconciliation management

• Automated tools to enable end-to-end reconciliations • Standardized templates by account type • Access to timely and accurate information through

robust reporting• Automated matching of transactions • Use of workflow to facilitate close and

reconciliation processes•

Leading practices

Technology

Technology

Page 15: How to improve financial close and reconciliation management

• Automates processes with integration of multiple systems• Automates dashboard and reporting capabilities to provide

transparency throughout the close• Automates internal controls to reduce testing• Automates “certification” of high volume/lower risk

accounts to reduce user time

Benefits

Technology

Tech

nology

Page 16: How to improve financial close and reconciliation management

By implementing the appropriate tools and adopting a comprehensive approach and framework, you can transform your financial close and reconciliation management processes to realize clear and substantial cost reduction and risk management benefits.

Conclusions

Page 18: How to improve financial close and reconciliation management

Deloitte, one of Canada’s leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte operates in Quebec as Deloitte s.e.n.c.r.l., a Quebec limited liability partnership.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

© Deloitte LLP and affiliated entities.Designed and produced by the Deloitte Design Studio, Canada. 13-3307