Saturday, Jan 22, 2022

Automating Data Management to Transform Reporting

Automating Data Management to Transform Reporting ProcessesFor all the enthusiastic talk of digital transformation and automation, FSN’s research,..

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Automating Data Management to Transform Reporting Processes

For all the enthusiastic talk of digital transformation and automation, FSN’s research, “Agility in Financial Reporting and Consolidation,” shows that unless finance organizations repair their data, financial reporting will always lack agility which can severely hamper organizations’ response to change. Seventy-two percent of organizations say that their agility is affected or greatly affected by data errors, and it is the early stages of the reporting process that give rise to most of the problems.

The difficulties are further compounded by lack of automation. For example, the research finds that nearly half (48%) of finance organizations spend too much time on closing the books in reporting entities, and a similar percentage spend too much time on subsequent steps, such as, data collection, validation, and submission of data to the corporate center.

The combination of a lack of data governance and control, coupled with insufficient automation has a negative impact on the productivity and timeliness of the group reporting process. Errors that “‘slip through the net”’ at an early stage are propagated efficiently along the record–to–report (R2R) process until they reach the corporate center, where they are difficult to fix. It is after all easier to repair an errant transaction where it first arises and where people are familiar with the context. Once they reach the center, errors take away valuable management time and create more pressure on an already overburdened month-end.

Fortunately, the path to a fully transformed and effective close process is easily within the reach of most organizations. There are three major steps that can be taken, namely, standardization, the elimination of spreadsheet data capture, and the automation of interfaces.

Standardization

Standardization is the foundation or underpinning of automation and should be embraced first. In the context of group reporting, it is about, for example, ensuring consistent data definitions and charts of accounts across the organization. Even where it is not feasible to have a single chart of accounts across the enterprise in detail, it is usually possible, to maintain a higher-level standardized chart that can be used for group reporting. Analysis codes, hierarchies and segmental reporting should also be standardized.

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Furthermore, month-end tasks and policies around accruals, depreciation, and journal entries can also be standardized to ease the month-end reporting process for all areas of business.

While standardization alone does not equal automation, it must occur for successful automation, which is a critical component when transforming reporting processes.

Eliminating Spreadsheet Data Capture

The research shows that around 40% of organizations use standalone spreadsheet templates for data capture. Historically, this approach has served many companies very well even though it is prone to significant errors and delay. For example, reporting entities can be tempted to alter templates without permission, introducing the possibility of overwriting formulae, data and macros without trace and jeopardizing the integrity of the entire reporting process. But with advances in affordable, cloud-based reporting solutions, organisations can leverage spreadsheet-style data capture without the disadvantages of standalone spreadsheet templates. In effect, organizations can “have their cake and eat it.”

Automating Interfaces

The most common interface in the R2R process is the link between the general ledger and the corporate reporting pack. Historically, organizations have relied on the upload of .CSV files and mapping tables to affect a data transfer. But such an approach is very susceptible to errors, as for example, metadata such as cost centers, accounts, and hierarchies, is changed on one side of the interface but not the other. Furthermore, validation checking is frequently insufficient to guarantee a flawless data transfer.

These days, leading vendors of consolidation software provide “connectors” to many of the popular general ledger solutions, simultaneously automating the elimination of most data errors and accelerating the close process. FSN’s research confirms that transformational leaders have made a significant investment in automated interfaces, specialized consolidation software (frequently in the cloud) and the elimination of standalone spreadsheets.

Automation and data management go hand-in-hand. These are the essence of successful transformation of the R2R process.


11 2021 Fsn Report Website Resource

FSN: Agility in Financial Reporting & Consolidation

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The post Automating Data Management to Transform Reporting Processes appeared first on insightsoftware.

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By: Gary Simon
Title: Automating Data Management to Transform Reporting Processes
Sourced From: insightsoftware.com/blog/automating-data-management-to-transform-reporting-processes/
Published Date: Fri, 17 Dec 2021 18:28:07 +0000

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