Every Finance and Accounting professional knows the financial close takes a significant investment in time and resources on a monthly and quarterly basis. The fact is this difficult process can and should be modernized; and the automation of the financial close is now easier to achieve. The pressure to improve financial planning analytics and capabilities, and build a more resilient accounting environment, has heightened over the years—and more so in the past twelve months as teams battle market volatility, cash flow, profitability, and risk management, as a result of the global health pandemic. AP automation is the lynchpin in the transformation of the financial close process, along with empowering employees to embrace change, and building a culture of continuous improvement.
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A recent report written by SSON, in collaboration with DataServ, described best practices for reducing the close time in a virtual environment, highlighting critical, tangible benefits to automating the financial close. These best practices are:
- Process Standardization
- Automation Technologies
- Solid Change Management
Standardization eases the burden on the close period as processes are documented and can be completed by any skilled specialist, independent of location. So, it is less dependent on tribal knowledge and more on consistency. In order to maximize efficiency, accuracy, and to produce monthly or quarterly statements and analyses, financial process standardization must take place across an organization.
Regardless of the size of your organization, a standardized process will be beneficial, but AP automation can optimize the standardization process. And there is no better time than now for enterprises to put the wheels in motion to tighten systems and implement standard processes globally.
Those responsible for the financial close process understand there are numerous benefits to AP automation. According to Scott Gilley, Director of Shared Services Accounting at Emerson Automation Solutions, automation is the key to a more efficient financial close. “A faster close also means cost savings for the company, it is a potential to reduce audit fees. Technology and automating processes are big enablers to closing the books faster.” He adds that “it’s not just about automating the close—but automation across the finance department. If your reconciliation process is automated it can accelerate the financial close and improve productivity, allowing accountants to focus more of their time on the important issues that arise from the close and reconciliation process.”
Companies that leverage AP automation are also more resilient. A critical driver of resiliency is minimizing the exposure to location and human-dependent input. Even in situations where locations are shut down or employees are working remotely, companies with automated processes can achieve accounting efficiency, mitigate risk, strengthen controls, and close their books faster.
Solid Change Management
True financial process transformation requires a fundamental shift in philosophy—one that combines technology, empowering employees to embrace change, and a culture of continuous improvement. Change Management is a significant aspect of any transformation and is often met with resistance because your team is being asked to do things differently. As painful as the close process might be—especially for F&A departments that are still working manually, it is a familiar process that people are often not willing to change. A successful change management requires good communication, effective training and support, a well-conceived and executed plan, a leader, and an automation partner dedicated to your success.
The combination of process change, technology, and change management will help to modernize finance and accounting departments, close the books faster, and provide organizations with a competitive edge.