Faster financial closing & Effective Management reporting strategies

Financial Closing & Effective Reporting Strategies

By : Dr. Dhirendra Gautam (Ph.D., CA, CMA & ICWA)

Visiting CFO Partner, Corporate Trainner, Mentor and Advisor

www.dhirendragautam.com

http://www.dhirendragautam.com/

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Dr. Dhirendra Gautam is a Mentor, Trainer and Corporate Advisor providing world class Mentoring, Training & Skill development to corporate Professionals, youths and students in India and across the world for better Career-growth, Employability and Leadership Development.

A Professionally qualified Chartered, cost & Management accountant with Ph.D. in business Management.

23+ years of international expertise in leading and managing the business and Finance around the world for 150 countries.

PRESENT Chief Executive Officer (CEO), Indiba Consultancy Services Pvt. Ltd. (www.indiba.in)

MD & Visiting CFO Partner (www.visitingcfo.com)

Chairman & MD, Navi Mumbai Chamber of Business & Industry (NMCBI)

PAST Global CFO – SuperMax Group (150 country)

Group CFO – Al Khodari group (Africa & Middle east)

Director Finance & Business planning – PEPSI (GCC)

Head of Finance (Shared Service) – UNILEVER ARABIA

Finance Manager – MOTOROLA

Worked in UK, Singapore, Middle East & India

Expertise in FMCG, Construction & Contracting, Retail, Financial Services, Utilities, Travel, Transportation and Logistics, Pharmaceutical, Manufacturing and other service industries.

Dr. Dhirendra Gautam (Ph.D. , CA, CMA, ICWA)

The Course Director


http://www.indiba.in/





http://www.visitingcfo.com/





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Finance Priority and Challenges

Sn. Financial Challenges Priority Index

1 Cash Forecasting 6.8

2 Period End Closing 6.7

3 Accounts Reconciliation 6.4

4 Working Capital Management 6.2

5 Banking Relationship 6.0

6 Consolidation 5.9

7 Debt & Other Investments 5.8

8 Pricing 5.8

9 Variance Analysis 5.7

10 Accounts Receivable 5.6

Note : Finance Priority Survey 2014, by Protiviti on a Scale of 0 to 10

Process Capabilities : Financial Transaction Process Capabilities : Financial Transaction


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Sn. Financial Challenges Priority

Index

1 Strategic Planning 7.0

2 Periodic Forecasting 6.9

3 Budgeting 6.8

4 Performance Management / Executive Dashboard / BSC 6.6

5 Profitability Analysis (Product, Customer, Channel) 6.6

6 Business Intelligence (Operational Reporting) 6.4

7 Margin Management 6.3

8 Profitability Reporting - Product 6.2

9 Profitability Reporting - Segment 6.1

10 Board of Directors Financial Reporting 5.9


Process Capabilities : Financial Analysis & Reporting Process Capabilities : Financial Analysis & Reporting



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The Changing Role of Finance : The New Direction

Decision

Support

Control

Reporting

Transaction

Processing

Decision Support

Control

Reporting

Transaction

Processing

Old Paradigm New Paradigm


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The Paradigm has not just shifted its reversed and reduced.

The New paradigm representing Efficiency gains (smaller size)

The boost in productivity represented by the relative increase in

resources in Decision.

The new paradigm is reached by transitioning from systems &

processes:

That are manually intensive, cumbersome, redundant, high

maintenance, and high cycle time to

Ones that are automated, streamlined, low maintenance, and quick

cycle time.


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Decision

Support

Control

Reporting

Transaction

Processing

Decision Support

Control

Reporting

Transaction

Processing

Old Paradigm New Paradigm

•Confrontational

• Independent,

•Veto Power

•Technical

•Compliance with

External Rules

•Minimal Involvement

•Problem Finding

•Post-Event Critique

•Sophisticated Analysis

•Strategic Market Issues

•Problem Solving

•Embedded

•Accountability

•Cost/Benefit

Sensitive

•Relevant to Business

• Rich Information

• Integrated

•Outsourced

•Quick Cycle Time

•Automated

•Streamlined

•Low Cost

•Data Collection

•Organizational

•Hierarchy Driven

•Manually Intensive

•Cumbersome

•Redundant

•High Cost

•High Cycle Time


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• Increasing

efficiency

•Ongoing reduction

in transaction

processing

effort

•Eradication of

errors reduces cos

of rework

•Continuous

improvement culture

emerges

•Regular, faster close

traps errors,

minimises

quality issues

•One set of standards

for group wide

integrity

•Programme instils

confidence

•Moves culture to

can do

• Increased focus on

value add content

• Improved job spec

motivates post

•Finance Business

Partnering

•Finance can do

more than the

basics

•Forward looking

business focus

•Enabler for greater

breadth of duties

The Finance Value Chain

Core Transactions and

Processes

Business Partnering, Decision

Support and Risk Management

Plan and

Manage the

Business

Financial

Analysis &

Reporting

Transaction

Processing and

Compliance

Financial

Closing


Achieving Faster high-quality Closing

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Collect data Close Adjustments Currency

I/C

Subsidiaries

Report Management

Legal

External

Analyze

6 Days 12 Days Average

Collect Close Adjustment Report Analyze and Forecast

<2 Days 6 Days World Class

More time!

Source: Hackett Group Benchmarking-Solutions Book of Numbers

Corporate Financial Closing & Reporting


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Financial Closing to Reporting At-a-Glance

Collect Data Calculate & Adjust Report

• Gather from multiple & disparate applications

• Store data in a centralized repository

• Generate financial statements, managerial reports, and perform ad hoc analysis

• Apply FASB and IFRS consolidation rules

• Perform currency translation & aggregation

“Consolidations applications are seeing a resurgence after what was

considered a maturing of this market, driven primarily by compliance issues

in the United States (driven by Sarbanes-Oxley) and worldwide (driven by

the International Financial Reporting Standards).”


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Financial Closing & Reporting – Challenges

Complex

application

portfolio

Surveys find that in a typical multinational company to have as many as 300 to

1,000 individual steps, each to be executed in sequence, in its closing process.

increasing the risk of executing these steps in the wrong sequence across ERP

systems and spreadsheets. And hence the risk for errors is substantially

increased

The human

element

Many companies deploy extremely large and complex spreadsheets to control

their closing process, relying on manual data gathering and file editing. Tasks

and processes must be defined at the lowest level of detail to eliminate any

uncertainty or opportunity for personal misinterpretation and resulting risk of

inconsistency over time and across business units.

Missing

documentation

Many global businesses use "a central spreadsheet” to record the sequence of

steps they undertake in a financial close, but they find it most challenging to

demonstrate and document precisely the calculation and approvals of critical

aspects such as judgments about doubtful debts or impairment tests

Compliance with

new standards

Global corporations constantly face new challenges. An example is

implementing accounting policies compliant with International Financial

Reporting Standards (IFRS) and reporting them in using eXtensible Business

Reporting Language (XBRL) IFRS compliance means adopting a new set of

accounting policies that interpret some events in ways that may be unfamiliar to

US generally accepted accounting principles (GAAP) trained accountants.


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Business Pressures

More Stringent Regulations

• What can I do to accelerate reporting as required by statutory regulations?

• How do I improve transparency, accuracy, and auditability?

Mergers & Acquisitions

• How can I ensure new acquisitions are quickly integrated into my company?

• How can I simplify keeping my books in synch with re-orgs?

Demand for Growth

• How can I improve visibility into overall enterprise performance?

• How can I help my managers identify opportunities to improve profitability?

Collect Data Calculate & Adjust Report


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Accounting Differences

• Charts of accounts

• Accounting methods

Manual, Error-Prone Processes

• Data extraction, transformation, and load

• Adjustments and eliminations

Operational Challenges

Lengthy close process with weak internal controls

Rigid systems that cannot exploit new opportunities

Disconnect between strategy and execution

$ $

Subsidiary 1

¥ ¥

Subsidiary 2

Joint Venture

Affiliate

€ €

• Intercompany

transactions

• Currencies

• Calendars

Complex Ownership Structures

• Minority interest

• Cross holding

Multiple, Fragmented Systems

Consolidation

Parent Company

£ £


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“The Hackett Group’s studies show that “world-class companies

spend 45 percent less” on their closing and reporting efforts than

other companies, which on average saves $5.5 million per $1 billion

in revenue. These savings come, in part, from needing fewer people

and systems to scrub data.”

How IT Executives Can Help Speed Up Financial Reporting, CIO Magazine, March 15, 2007


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Fast Financial Closing - Definition

Routine process of completing the accounting cycle and preparing

internal and external reports…

Fast Close is accelerated financial and management reporting in

pursuit of value creation. This is achieved by the design

and implementation of a stable and focused closing cycle with optimal

use of available technology providing management with the

key financial information to enable proactive management action

By rationalising existing processes, minimising manual effort and

increasing the use of automation and technology, Fast

Close accelerates financial and management reporting

Companies that are able to close their books quickly and deliver more-

timely information to external and internal stakeholders can gain

competitive advantage in a rapidly changing marketplace.


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What is Fast Close? Fast Close is a process and methodology which utilises current best-

practice for Financial Close, Consolidation, and Reporting theory

Fast Close combines working smarter throughout the month, and at

month-end, with technology enhancements, in order to close sooner

and with less overtime at month-end

Fast-close focuses on improving discipline in the finance area and on

standardising as many of the pre-close, close, consolidation, and

reporting processes as possible across the various Business Units /

Operating Entities

Fast-close does not mean simply closing the period off earlier in the

month


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Fast Close – Misconception Fast close is all about financial consolidation

Only by using a single chart of account will companies improve their

reporting process

Operating units or Group Consolidation are the only focus of attention

and will provide the majority of the improvements in a typical project

Improvement can be achieved by closing prior to month end and rolling

forward

Improvements in reporting and closing processes are only possible if

you spend money on IT

If you report faster you are bound to be less accurate


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Performance

Management Cost

Reduction Internal time

Pressure Statutory &

Regulatory

time Pressure

Market

Perception

There are number of business drivers that are forcing Organization to focus on “Fast Close”

Why “Faster” Financial Closing..?

• Business

leaders

require fast,

accurate

information to

support

decision

making

• Faster

Business

Decision

• KPI & Role

Driven

• Optimization

of the

Finance

Process

• Process

Efficiency

• World class

processes

• Increased

Information

Flow

• Input to

decision

making

• M&A

• Diversification

and

Expansion

• SEBI, ROC,

BSC, NSC,

Tax Authority

• IFRS,

USGAAP,

Sox

• Industry

specific

regulatory

requirement

• Shareholder

Value

• Stakeholder

Value

• External

stakeholders

and

regulators

want more

transparent

information in

less time


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• More timely

processes

• Increased

automation

• Routine activity

rationalised

• Information is

complete,

integrated real time

• Finance shift

• Number crunching

is minimised

• Analysis time is

maximised

• Increasing

efficiency

• Ongoing reduction

in transaction

processing

effort

• Eradication of errors

reduces cost of

rework

• Global consistency

• A simplified/

streamline audit is

enabled

• Continuous

improvement

culture emerges

• Regular, faster

close traps errors,

minimises

quality issues

• One set of

standards for group

wide integrity

• Allows standard

global processes

• Single version of

truth facilitates

confidence

in decision taking

• Programme instils

confidence

• Moves culture to

can do

• Increased focus on

value add content

• Improved job spec

motivates post

holder

• Skills and

competencies

broadened,

deepened to

aid delivery

• Finance can do

more than the

basics

• Forward looking

business focus

• Enabler for greater

breadth of duties

• Development of

Finance Portal

• Finance seen to

add value, support

the business

Benefit of “Faster” Financial Closing

Speed Cost

Reduction

Improved

Quality

Motivated

People

Enhanced

Finance

Function


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Benefit of “Faster” Financial Closing

Phases Emphasises What is Addressed ?

Pre Close Preparation • Error tracking & Continuous

Improvements

• Data Quality

• Process Stability

• IFRS, SOX applicability

• Technology Environment

Close

• Re-engineering, Information flow

at local level

• Process Analysis

• Timing issues

• Global Vs. Local

• Responsibilities

• Information Integration

• Technology Interfaces

Consolidation

• Data Integrity / Integration • Accounting Policy

• Integration

• System Support Issues

• Process Documentation

• Validations

Reporting

• Re-engineering of Reporting

delivery

• Improvement of Analytical

Capability

• Timing

• Quality of Information

• Relevance of Information

• Distribution of Information

• New Information Need

Faster Financial Close Covers all aspects of the closing Process


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4.8

5

5.2

5.4

5.6

5.8

6

1997 2001 2003 2004

Days to Close

Avg. Co.

Average number of days to close.

The average number of days a median company took to complete its quarter-end close.


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A Hackett Group study at that time showed that the average closing cycle for

companies was six business days, and the average reporting cycle was another 5.4

days. Closing cycles did improve earlier in the decade. However, Sarbanes-Oxley

(SOX) compliance requirements stalled and even slightly reversed the trend toward

shorter closing cycles, in 2003 and 2004.

The Hackett Group publishes benchmark data on financial processes, including the

financial closing and reporting cycle. In their 2007 study, Hackett reported that the

average company took 5.9 days to close their books. In 2003, the Hackett Group

reported that the average company’s financial closing cycle was 5.2 days, with another

5 days spent on reporting. Top-performing companies in the study reported combined

financial closing and reporting cycles of 5 business days or fewer. Although this data

represented an improvement over the results in Hackett’s 1997 study, SOX compliance

requirements stalled and even slightly reversed the trend toward shorter closing cycles.

Average number of days to close.


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Collect data Close Adjustments Currency

I/C

Subsidiaries

Report Management

Legal

External

Analyze

6 Days 12 Days Average

Collect Close Adjustment Report Analyze and Forecast

<2 Days 6 Days World Class

More time!

Source: Hackett Group Benchmarking-Solutions Book of Numbers

Corporate Financial Closing & Reporting


Faster Financial & Reporting Closing – Best Practice

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Management and Cultural Changes to Achieve Fast Close

Necessary Management and Cultural Changes to Achieve Fast

Financial Closing and Efficient Reporting

Reduction in the number of legal entities to consolidate

Finance Shared Service with Centralised Finance Operation

World Class ERP System with

Clearly defined key performance indicators

Focus on top-level results rather than unnecessary details

Eliminating interim closes


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Financial Closing & Reporting – Best Practice

Date Collection, subsystems

closing

• Data at source; few manual entries

• Automated interfaces

• Accounting complexity reduced

• Don’t hold up close for minor errors

• Use pre-month end reserve and closing reviews

Book Closing • Materially limits established

• Work performed outside of close

• Error correction reduced

• Adjustments “true up” on quarterly basis

• Entries pre-formatted and automated

Consolidation & Review • Automate critical processes(intercompany)

• Reduce information to consolidate

• Eliminate and consolidate reviews

• Financial report through one consolidation system

Reporting • Reduce volume of reports

• Manage by exception

• Establish balanced scorecard

Forecasting & Forward

looking

• Relate volume and $ forecasts automatically

• Use “stub period” estimates to reduce closing cycle

• Automate forecasting process

• Flash income forecasts produced first day of close

• Use of forecasts critical to soft close


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Date

Collection,

subsystems

closing

• Capture data at source with few manual journal entries.

• Invalid transactions from feeder systems are resolved

before the start of closing.

• Account validation and maintenance are done using one

controlled data base.

• Automatic table updates when there are organizational

changes.

• Program edits in all feeder systems and rules for edits

are provided in standards for internal control.

• Close critical systems and update transaction data

weekly. Feed subsystems more frequently than monthly

Financial Closing – Best Practice


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Date

Collection,

subsystems

closing

• Summarize data from subsystems before posting to general

ledger.

• Track errors and assign responsibility for error recycling.

• Systematize routine journal entries, distributions, and closing

entries before accountants impact the closing process.

• Chargeback support-related expenses (allocations) based on

market or standard rates.

• Use of materiality limits to reduce entry and account detail and

manage time spent on small items.

• Reduce number of accounts and transaction codes.

• Tracking errors and assigning responsibility for determining root

cause and ensuring that errors never happen again.

• Chargeback/allocations of support-related expenses using

standard rates. These entries can then be run before the close

cycle.

• Use of materiality limits to reduce entry and account detail. This

is only important for manual entries that are required during the

close cycle. This is when you need to decide whether to make

the entry and affect downstream tasks or whether to book the

entry the following month


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Book

Closing

• Corrections of immaterial errors and adjustments should be done in the

following month.

• Book accruals at the subsidiary and not at the organization level. This can

be trued up the following month.

• Use pre-formatted accrual, elimination, reversal, and adjustment entries,

where possible, and automate.

• Use ratio and accrual rates based on previous month’s calculation.

• Establish materiality limits to book adjustments.

• Make external to the closing process.

• Selected activities:

• Reconciliation

• Immaterial error correction

• Account maintenance

• Calculated accrual percentages

• Minimize error to about .02% (233 errors per 1,000,000 lines of account

attributes).

• Use quarterly or annual true up to adjust as necessary, not monthly.

• Trend monthly accruals and record recurring estimates as recurring

entries.

• Reconcile accounts on a cyclical basis based on risk and do outside the

close.

• Establish performance metrics to monitor speed, quality, and cost of

closing.

• Only resolve material items during segment review at segment level and

reverse next month to book at market level.

• Same analogy could work at corporate.


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Consolidation

& Review

• Consolidated data should be pre-formatted and system should

automatically produce segment and corporate consolidated

reports.

• Reduce required information for consolidation.

• Avoid replicating financial data in separate reporting systems.

• Establish materiality limits for review and approval steps.

• Minimize number to review layers.

• Consolidated numbers are highlighted when outside budget or

trend control limits.

• Profit center and legal entity reporting are driven from the same

source of data and always balance.

• Intercompany eliminations, currency translations, and

corporate/segment allocations are done in an automated

manner to not hold up close.


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Financial Reporting – Best Practice

Reporting

• Formats based on key performance indicator and financial

reports.

• Report variance of hardcopy reports and have strategy for

retiring obsolete reports.

• Design executive report package to include trend, graphical,

comparison to target and “story line” information.

• Ability to “drill down” to analyze significant variances.

• Maintain financial data warehousing using relational data base

technology to access financial information.

• Responsibilities for reporting to executives are clearly

delineated with minimal adjustments after the consolidation

process.

• Automate month-end reporting for income statements, balance

sheet, cash flow, and performance metrics, including Value-

Based Management concepts.


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Financial Reporting & Forward looking – Best Practice

Forecasting

• Ability to develop flash income estimate after first day of

close.

• System modelling capability to create net income

forecasts from the estimate.

• Ability to analyze difference between forecasts and

actual based on the analysis of major “profit centers”

(e.g., volume, price, cost, mix, currency, etc).

• Use of forecast as part of introduction of soft closing

process for months that do not end a quarter.

• Ability to use product or service composites to forecast

profit margins. A composite is a grouping of services or

products such as combining products into product lines.

• Data base of forecast information integrated with actual

and budgeted information.

• Forecasts visible to all individuals that are responsible

for major “profit drivers”.


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Implementing – Faster Financial Closing

Create the Vision

of Finance

Get Ready For

Faster Close

Visualize Target

Environment

Extend to Soft

Close Process Implement Target

Processes

• Create & design

the team and

steering

committee

• Define

customer

requirements.

Bothe Internal &

Externals

• Determine

finance function

goals and

measures

• Identify the

world class best

practice

• Evaluate

current

environment

• Perform

resource and

cycle time

analysis

• Assess systems

affecting the

close

• Identify non

value added

activities

• Identify

improvement

targets

• Identify close

process metrics by

portions of value

chain

• Define materiality

• Define closing

entry process

• Define end of

month and

beginning of

month processes

• Identify

outstanding issues

• Analyze major

performance

• Develop process

implementation

plan

• Conduct

training

• Implement

changes

• Monitor

progress

• Benchmark the

outcome with

identified target

• Develop

monthly

performance

scorecard

• Define soft

close process

• Implement soft

close

• Implement

periodic review

and

enhancements

• Set the next

level

Benchmark

Implement Change Management through the Process


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Leading Practice for Close at Work Day 5

Close Activity Day Activity

Complete

Production/Process Order Closure -1

Payroll & OT -1

Inventory -1

Material Close 0

Accounts Payable 1

Fixed Assets/Depreciation 1

Cash & Bank Recon. 2

SG&A Accruals 2-3

Revenue 2-3

Operational Costs 2-3

Accounts Receivable 2-3

Intercompany 3

Legal Entity Ledger Close & Review 3-4

Consolidation Activities & Review 4-5

Management Reporting 6-7

Clo

se P

rocess

5 WD


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Best Practice for Close at Work Day 2

Close Activity Day Activity

Complete

Actual

Achieved

Production/Process Order Closure -1 -1

Payroll & OT -1 -9

Inventory -1 -1

Material Close 0 -1

Accounts Payable 1 0

Fixed Assets/Depreciation 1 0

Cash & Bank Recon. 2 1

SG&A Accruals 2-3 1

Revenue 2-3 1

Operational Costs 2-3 1

Accounts Receivable 2-3 1

Intercompany 3 0

Legal Entity Ledger Close & Review 3-4 1

Consolidation Activities & Review 4-5 2

Management Reporting 6-7 2

Clo

se P

rocess

2 WD


The Road to Fast Reporting

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Accounting irregularities have

brought financial reporting

into the spotlight

The Challenge of Corporate Reporting

Fast close vs data quality

Fragmented reporting supply

chains

Autonomy vs accountability

Decentralised vs single stream

Audit controls vs flexibility to keep

pace with change

Too many spreadsheets….


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PwC survey

16% Base reporting on strategy

27% Clearly explain underlying

revenue drivers

31% Align KPIs to strategy

19% Link external drivers to strategic

choices

7% Communicate detailed

commentary across reporting

models by segment

• Compliance-driven approach to

external reporting

• Focus on financial measures to the

detriment of non-financial reporting

• Increasing pressure of timely

reporting to investors and markets

• Governance more important than

transparency?

• Finance overwhelmed by factors

not aligned with the reporting risks

Source: PwC Competitive Edge Survey 2011


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Shareholder suits may follow if the mistakes are material to the

company’s Report and it’s forced to restate financials. Further, finance

departments will be burdened by having to re-do the reports, and the

company may incur added cost and complexity if it has to hire a third

party to audit those numbers again. Finally, a restatement can be career-

ending event for the CFO or controller. “Who would want to employ a

CFO who made a material mistake and had to re-file their account?”


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Optimizing the Financial Process to Fast Reporting

Close sub ledgers into GL (AR, AP, FA, etc.)

Perform Reconciliations and Post Accruals

Deliver self service financial reporting to the organization

Create external reports with disclosures and financial data

Automate and deliver external & statutory filings

Gather and validate complete data sets to support all financial reporting needs

Automate consolidated financial reports leveraging multiple hierarchies and calculations

Sub Ledger Close General Ledger

Close Data

Assurance Consolidation

Internal Management

Reporting

External Financial Reporting

Filing


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Get it right first

time!

Apply a corporate close calendar for feeder systems to G/Ls.

Automate allocations and accruals in the G/L.

Standardise reporting formats for reliable data and faster review.

Central Finance

efficiency

Perform intercompany reconciliations ahead of month end.

Use phased submissions to act on availability of site data.

Create automated ledger integrations for fast load of financial data.

Intelligent review

Design hard and soft validations to facilitate one-touch reviews.

Streamline the approval process – focus on what matters.

Use process controls to minimize post-close entries.

Consolidation &

Reporting

Automate top-side adjustments and equity eliminations.

Build consolidation hierarchies that match cycle requirements.

Use exception reporting with drill through analytics.

Integrate financial and management reports as production packages.

Best Practices

Optimizing the Financial Process to Fast Reporting


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Technology to improve Faster Closing & Reporting

PERFORMANCE MANAGEMENT APPLICATIONS

Strategy

Management

Business

Planning

Profitability

Management

Financial

Reporting &

Compliance

EPM Workspace

OLTP & ODS Systems

Data Warehouse Data Mart

SAP, Oracle, Siebel, PeopleSoft, Custom

Business Process

OLAP

Fusion Middleware

Business Intelligence Foundation

BI Applications

EPM Workspace

Excel XML


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Financial System to Achieve Fast Close & Reporting

Necessary Financial Systems Changes to Achieve Fast Close and

Effective Reporting

Adopting a fully integrated financial application system, ERP , SAP &

Oracle , BI and Hyperion

Deploying an automated financial consolidation system

Using an automated, intercompany accounting system, which allows

transactions to occur between different legal entities owned by the

same company

Leveraging a Web portal for delivery of standard reports

Linking a Web portal to an online analytical processing database that

allows companies to conduct ad hoc queries and analyses


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Although automation can relieve some of the human factor, it can be

an albatross in its own way. The more things are automated, the

harder it can be to update the system, and the more a real person

may have to update it by hand.

“The technology alone is not a silver bullet,” “These initiatives require

a balanced focus on people, process and governance in order to

truly realize each application’s full value.”

Financial System to Achieve Fast Close


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“The new Group Reporting System

successfully merges multiple reporting

models across the group, improving

the efficiency of our consolidations. We

have reduced our monthly closing

cycle by around 2 weeks and save 30+

man days of time at head office.”

Group Financial Controller

Tata Steel Europe

£12 Billion t/o service and steel

manufacturing company

Tata acquisition of Corus

imposed fast close challenge

Concentric business process

review ensured project focus on

key drivers for change

Global deployment in 8 months

Single stream, centrally

architected solution cuts 2

weeks from closing cycle

4000 spreadsheet reports

replaced with 300 HFM reports

Deployment of HFM reduces

close by 2 weeks

Use of ERP to Achieve Fast Close & Reporting

Note : Date and Facts from Oracle Corporation


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Deployment of Hyperion Financial Management Pays for Itself in 18 Months

BUSINESS CHALLENGE

• 20 days to close

• Lengthy year-end reporting

• Costly financial reporting

process

• 78 charts of accounts

• Widely varying reporting

definitions and procedures

VALUE DELIVERED

• 6 days to close

• Reduced year-end reporting by

25%

• $1 million annual savings

(67% ROI)

• 1 reporting chart of accounts

• More productive finance staff

Global publisher of textbooks for the education,

business information,

and consumer publishing markets

Saves $1 Million Annually

Use of ERP to Achieve Fast Close & Reporting

Note : Date and Facts from Oracle Corporation


Reporting Strategies

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Sn. Financial Challenges Priority

Index

1 Strategic Planning 7.0

2 Periodic Forecasting 6.9

3 Budgeting 6.8

4 Performance Management / Executive Dashboard / BSC 6.6

5 Profitability Analysis (Product, Customer, Channel) 6.6

6 Business Intelligence (Operational Reporting) 6.4

7 Margin Management 6.3

8 Profitability Reporting - Product 6.2

9 Profitability Reporting - Segment 6.1

10 Board of Directors Financial Reporting 5.9


Process Capabilities : Financial Analysis & Reporting Process Capabilities : Financial Analysis & Reporting



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Insight

Performance

Action

Set Goals

Model

Plan

Monitor

Analyze

Report

Finance Reporting Strategies


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Operational &

Statutory

Reporting

Management

Reporting

Board PACK

LEVEL 1

LEVEL 2

LEVEL 3 Strategic Management reports, Performance reports,

KPI and Status Updates on various Projects and

initiatives

Functional &

Department

Reporting

Sales, Marketing

Manufacturing

and SC

performance

reviews

Framework for Financial Reporting

Finance Reporting Strategies

Profitability

Reporting by

Product, Customer

& Channel

• Daily, Weekly, Monthly & Quarterly reports,

• Profit & Loss Accounts, Balance Sheets

• MCA returns, SEBI Compliance, IT compliance reports


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The Financial Reporting Trend & Board Pack

Actual Board Presentation Pack of a MNC will be presented to

the participants on the date of Training. This will give a real-

time experience to them:

1. What is the latest reporting trend

2. How a Reporting Board pack is prepared &

3. what are the reports to be included in this report pack


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Questions?


Thank you

Dr. Dhirendra Gautam [email protected]



Self Improvement

Faster financial closing & Effective Management reporting strategies