Reducing spreadsheet risk in financial consolidation
In this fourth in a series of five blogs looking at how modern analytics can reduce spreadsheet risk and inefficiency, we will look at the impact that spreadsheets have on financial consolidation.
As we discussed in previous blogs on analytics and budgeting and planning, finance leaders often reach for their favorite spreadsheet when starting a new financial planning process, and that equally applies to financial closing and consolidation. This may be fine in a small company, but using spreadsheets can quickly become problematic as soon as any complexity is added.
The single biggest issue caused by spreadsheets when used to close the books is the time taken to manage the time-consuming process of the integration of financial data. Closing the books is a time-sensitive process. Any delays can cause serious business issues through a lack of visibility into the organization's current state and missing regulatory deadlines. It also takes valuable time away from the finance department when they could be analyzing the data, not integrating it.
Spreadsheets are just not designed to handle the process of integrating data from multiple entities, each of which could be running a different finance system or using various database technologies. It's not uncommon for a mapping to be required between each entities' chart of accounts and the global chart of the parent organization. Inevitably, these mappings can change, and so it's necessary to check these manually along with data connections and formats every time consolidation is required.
This is why using a modern analytics platform is so important when it comes to managing the financial close. The complexity involved in accessing and mapping the data must be managed in a platform designed to do this job and not left to the finance team to do this manually, wasting valuable time with the potential to unwittingly introducing costly errors at the same time.
A platform designed for the job can integrate with multiple finance systems, has built-in support for the things that make consolidation so complex, including multi-currency support, intercompany eliminations, and reporting under the various regulatory accounting guidelines. Many will support using a familiar spreadsheet as the front-end while ensuring finance staff only access a centrally managed and trusted repository of financial data and mappings.
Infor d/EPM's Financial Consolidation module allows organizations to consolidate multiple sets of books quickly and seamlessly from each of its legal entities, process elimination entries, and generate a single set of financial statements. Financial consolidation is fully integrated with Infor ERPs and can simplify and automate the tasks associated with consolidation, allowing organizations to spend more time on financial reporting and analysis. Powerful capabilities enable collecting, consolidating, and reporting accurate data from operating units worldwide while quickly delivering financial results to senior management. Organizations can improve data accuracy, avoid closing delays, improve auditability, comply with regulations, and close books rapidly and confidently.
Since adopting Infor's modern data architecture for its financial reporting, Infor customer Pilot Flying J has seen a dramatic improvement in the time taken to run the monthly close reports. A report is run for all 750 stores in the company. Before, that process took over twelve hours, making it hard to re-run when changes happened. With Infor, the same workload takes five minutes. This has resulted in a massive leap in productivity and means that the business can be more agile when making changes and updates. Best of all, Pilot Flying J can now see those results in a few minutes.
Read more about retiring spreadsheets from the financial consolidation process and four other ways of reducing spreadsheet-created risks and inefficiencies in your organization in our best practice guide today and watch the on-demand webinar where you will hear from Infor customer ORS MEDCO on how they improved their financial consolidation process with Infor d/EPM.