3 new approaches to attaining deeper financial analytical insight
If the old ways are now less effective, then what ideas and technologies are replacing them? Industry leading finance teams (led by data driven CFO’s) are adopting and following three new approaches for achieving a timelier, higher quality analysis and reporting paradigm.
The faster close has long been an objective of many finance functions. A fast close is one that minimizes the time to release monthly or quarterly financials after the period ending date. However, leading organizations have realized that many of the techniques used for achieving the fast close actually enable even more frequent levels of reporting.
Achieving the fast close often requires a change in mindset as a first step. Instead of waiting for the calendar to turn over to begin closing the books, those executing the fast close are proactively reconciling and reviewing key accounts on a more frequent basis (weekly, daily, or automating integrity checks into the system). This approach identifies errors earlier and alleviates the amount of work required at month end. However, the added benefit is the organization has reliable data of the transactional activity that can be accessed to create more timely intra-period reports.
A second enabler of real-time reporting and analysis arises with the deployment of a cloud-based solution that can pull in data from different entities and sources. This eliminates the time-wasting hand-offs of information that slow down all forms of financial reporting.
When the databases are updated and available in real-time, reports of various sorts can be issued more frequently. Frequent reporting can take pressure off the month end financial report, as managers are able to identify problems and act earlier to find solutions. This ability to monitor and react improves performance.
The way organizations are gaining deep financial insight is changing. As an executive, you have a decision to make about how you choose to deploy your human resources and the extent to which technology enables your finance department to add more value across the enterprise.
A fast close mindset helps because it heightens the need to maintain data integrity throughout the period instead of just once a month. Once this real-time mindset is adopted, opportunities for more frequent weekly, daily, or even on-demand reports and analysis emerge.
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