Many people outside the finance department of public companies expect that the quarterly process of closing the books and reporting results is a stable, repeatable cycle. In fact, it’s in a constant state of evolution from changing regulations, accounting standards, M&A and international growth. Companies are at risk of missing deadlines and reporting errors without a new approach.
At most companies today the closing process is defined by silos with function-specific technologies, isolated teams and manual spreadsheet entry. The space between these silos creates risk that changes in one function may not be properly reflected by others, which can lead to a delay or even restatement of results. The impact to the stock price and investors’ confidence can be considerable, and since CFOs sign off on quarterly filings, they bear considerable personal risk.
In the past, CFOs managed this risk by hiring more people and automating the pain points in the closing process. Yet these fixes will not keep pace with growing pressures from regulators and increased complexity within companies. What’s more, the automation of certain processes introduces a new risk that data will not be properly transferred between systems. These growing complexities call for a holistic approach.
A single tool that automates the entire record-to-report process removes the burden and risks of low-value, manual tasks; it gives CFOs and controllers crucial visibility into the status of the close and material items that might impact results; it creates an audit trail to monitor and track controls; and it promotes collaboration among increasingly global teams.
This shift is not a simple one for any organization, and I know this because Trintech made this transition itself. We have created individual technology solutions for the finance department for more than 20 years. As the number of regulations and time pressures increased, it became increasingly clear to us that a holistic, automated approach is the only way for companies to meet these demands.
Converting to an end-to-end approach can seem daunting at first glance, but armed with the right tools and processes, companies can gain significant efficiencies. In fact, we are working with numerous companies today in the early stages of this transition that are already realizing benefits in saved time and greater confidence in their data. Once in place, an automated system equips finance teams with a tool to create a consistent, repeatable reporting process that stays ahead of organization and regulatory changes.