The cloud helps organizations centralize core processing functions and facilitate seamless coordination between business units and the corporate accounting group (Photograph courtesy of Sage Intacct)
Corporate accounting, long viewed as the custodian and curator of financial data, may be falling behind the times. While clinging to the manual processes and spreadsheets of the past are a comfort for many finance professionals, it’s important for the industry to recognize that financial consolidation has advanced significantly in recent years. According to Next Generation Financial Consolidations, a white paper prepared by global cloud accounting and financial management solutions provider, Sage Intacct, major technological advancements in consolidation are now forcing senior financial executives to ask themselves: “Is my consolidation process a source of value creation or a barrier inhibiting greater strategic contribution in my organization?”
CURRENT CHALLENGES OF CONSOLIDATING FINANCIAL DATA
Consolidated financial statements group together the financial data and results of all entities under a single parent company’s control. This provides stakeholders and regulators with a valuable, unified and operational view of the consolidated entities.
However, the traditional financial consolidation process has long been an onerous drudgery of information assembly, data validation, and reporting. Relying on painstaking manual data entry and several siloed technologies, the process takes weeks and sometimes even months to complete, which is problematic in today’s fast-paced and complex business environment.
“This seemingly endless consolidation process is both time-consuming and prone to human error, no matter how organized, properly communicated, or methodical the process. The bottom line: a reliance on spreadsheets and manual procedures is holding back many finance professionals from playing a greater strategic role in their organization,” says David Rumer, vice-president, market development at Sage.
In fact, a recent study by Financial Executives Research Foundation and Robert Half found that 58 per cent of companies still manually reconcile accounts. But there is, in fact, a better way to construct your financial consolidation process.
THE FUTURE OF FINANCIAL CONSOLIDATION
By implementing leading cloud financial management systems like Sage Intacct, today’s organizations can be at the forefront of financial consolidation. Leveraged by organizations from start-ups to public companies—and offered by hundreds of CPA firms—the Sage Intacct solution includes the following tools, all delivered through the cloud:
- Cash management
- Vendor management
- Financial consolidation
- Revenue recognition
- Subscription billing
- Contract management
- Inventory management
“By using an integrated cloud financial management system, the consolidation process becomes automated and streamlined. Automation facilitates more rapid growth by accelerating the initiation and integration of new entities in any global jurisdiction with the corporate consolidation function,” adds Rumer.
Moreover, the cloud helps organizations centralize core processing functions and facilitate seamless coordination between business units and the corporate accounting group. Crucially, the cloud also enables real-time consolidation across the enterprise without needing to wait for period end. “Finance leaders can share timely information with confidence, which boosts credibility and provides the opportunity for an organization to experience unlimited value in their business,” says Rumer.
A golden opportunity awaits everyone—from senior financial leader to top-notch finance talent. “When organizations are able to automate the consolidation process, accounting staff are liberated to perform higher valued work, spending only a fraction of their time on manual assembly and reconciliation,” concludes Rumer.
Click here to learn more about the future of financial consolidation and what leveraging a cloud accounting solution like Sage Intacct can do for your organization.