What could be a consolidation manager’s worst nightmare?
Of course, being late for publication, or having to make last-minute plugs (not controlled journals) to restore consistency in the figures.
Most consolidation managers are sensitive to the leverages that could reduce risk, increase quality, and improve closing delays. But in general, few risk a global approach, and generally try to correct problems at the margin, without necessarily trying to correct the underlying issues.
However, the approach is simple (and doesn’t take much more time), and resides in the consideration of three pillars:
These three pillars are intertwined and inseparable. To separate them is to carry out more expensive projects, and may cancel all the expected benefits (ROI, closing delays, …).
The automation of tasks must obviously concern recurring tasks.
But these same recurring tasks may very well concern tasks managed centrally, as well as tasks managed in subsidiaries.
In a non-exhaustive way, we can mention the following HQ tasks:
Tasks in subsidiaries can be:
Automation makes it possible to:
On the automation of balance upload from accounting systems, should not be manual:
inconvenient of having manual upload: think of the disadvantages of not covering these last miles in terms of auditability, risk, inertia, …
this step is rarely the most complicated is often left aside, introducing manual extraction and loading tasks,
When it comes to automating HQ tasks, the ROI is not always easy to demonstrate, because the associated risks are forgotten:
Automation of tasks is not always possible. Some actions remain manual. The good execution of a process remains mainly in the limitation of the exchange and intermediate. Indeed, it is better to avoid manual consolidation processes where the information passes through one or more intermediaries before arriving in the final system. This type of practice should be avoided by taking care to:
Decentralization must also make it possible:
The success factors of decentralization lie in three areas:
The last pillar concerns the auditability of information.
Auditability makes it possible to:
In the case of automation, auditability should be guarantee by never brooken the chain between source and target data:
For decentralized tasks, a point of attention must be brought on:
This step should not be neglected, and small efforts can in most cases address this problem.
For example, the transfer of accounting balances in a fully automated end-to-end flow does not require special access in each ERP (to be able to transfer an accounting balance to a set of invoices for example). Nevertheless, the simple fact of including in the extractions the accounting document number (in detail of the balance) can allow the retrieval of auditable information (or even automated afterwards, by developing a query capable of querying the document in parallel). Performance issues can be taken into account but can be circumvented by implementing datamarts.
The ROI of such a project is done by evaluating the costs and benefits.
For task automation, the implementation costs incurred by automation depend on:
The associated gains are evaluated over (generally taken over a period of 3 years, the period of amortization of the investment):
For the decentralization of tasks, the costs are to be assessed accordingly:
… and gains can be calculated by taking:
Finally for auditability, the costs concern the implementation of the tools/interfaces, and the gains are often synergies with the first two pillars:
You can download our ROI evaluation template with our attached excel template (free access).
To conclude, the nesting and interweaving of the three pillars is inherent in the financial and closing processes.
Evaluating and taking these three pillars into account upstream of your project guarantees results and enables you to be part of a sustainable and flexible reporting solution.