Automating financial consolidation helps finance leaders to see the bigger picture.
Sean Taylor, director of Insight Consulting, an end-to-end data and information consultancy, says automated financial consolidation empowers finance leaders to focus on business strategy instead of preparing numbers.
The finance function is in an exciting time of change: technology is driving new efficiencies, and digitisation promises to transform the very nature of financial operations. Businesses are faced with the challenge of how-to best leverage technology to gain real insight into their organisations’ performance. Yet, many companies still struggle with manual processes such as financial consolidation, especially companies that have large numbers of business units or locations, operate in multiple currencies or need to support multiple accounting standards.
The strategic path to financial consolidation
According to Sean, short-term solutions tend to be piecemeal and lack complete integration with other key corporate functions. They can also result in leakage between lines of business, duplication of data entry efforts, and lost opportunities for benchmarking and performance management.
In contrast, automated financial consolidation can provide an end-to-end view of your organisation’s financial information – unlocking the value in this information and enabling comprehensive scenario planning.
Sean explains that Insight Consulting plays across the full data value chain, from data capture to integration and consolidation. Focusing on just one step in the data value chain is no longer enough.
“Now, more than ever, having visibility of and understanding the entire business data lifecycle is imperative. We’re able to help companies optimise every step of their data flow, ensuring high quality and consistency.”
Looking ahead for the CFO
Using spreadsheets to consolidate financial data is inefficient, time-consuming and error prone. Finance leaders who switch to modern financial planning and consolidation tools save money, time, and achieve more accuracy, shifting focus to analysing the data and applying strategic thinking to the numbers.
The reporting aspect, coupled with data analytics, empowers users to make decisions. Rather than having to compile reports or spend time trying to get reports from a provider, users can now get information in real-time, which allows them to make better decisions faster. Likewise, quarterly, and yearly forecasts are no longer necessary because users can look at their data in real-time and make monthly or weekly forecasts based on the information.
Reducing multiple risks at once
Spreadsheets are often used in finance, but they can create risk, duplicate work, and cause lengthy closure processes. Fortunately, technology is available to streamline the financial consolidation process.
One of the biggest risks with spreadsheet creation is that the individual who creates the spreadsheet inadvertently becomes the owner of that knowledge. When movement takes place within the organisation, understanding of the build logic is often not fully transferred to new owners.
Data security is a high priority in today’s businesses. The traditional approach to budgeting, sending spreadsheets around or emailing them to people on shared drives can be very risky. The solution Insight Consulting offers, provides comprehensive row level security, an ideal alternative for companies who value their data.
Consolidating accounting information across multiple business units and national borders can be an arduous task. But with the right financial management software, finance leaders can simplify the multi-level consolidation of complex group structures and reporting, including robust standardisation of processes through in-built workflows, fully automated features, currency conversion, handling of intercompany transactions, investment eliminations and reconciliation.
When consolidating financial statements, there are specific calculations and consolidation adjustments made as the numbers are combined from the parent company and its subsidiaries. These include foreign currency translation, elimination of intercompany transactions and balances, adjusting journal entries, and accounting for partial ownership.
In terms of functionality, their Corporate Planning software deals with such issues in a controlled, governed manner. These tasks are made easier by automated currency and conversion rates. Additionally, making reports available to many people across multiple regions.
Their solutions can be tailored to meet the specific needs of each organisation and scale as needed.
Partnership approach
Sean says, “At Insight Consulting, we partner with the finance leaders in our clients’ organisations through the transition process to ensure minimal business disruption.”
He explains the process, saying, “We work in stages, building and testing each part of the solution as we go. This allows us to identify any areas that need adjustment before we release a final version; it also allows us to see how people use the system.”
Insight Consulting’s company culture is one of collaboration, professionalism, and transparency. “We have never seen ourselves as simply project implementers,” says Sean. “Instead, we’ve aimed to partner with businesses and walk with them along their journey. Our consultants are always there to support our customers.”
Find out more about how you can leverage automated financial consolidation to see the bigger picture at the Insight Consulting stand at the live Finance Indaba at the Sandton Convention Centre on 20 October.
