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The Close-to-Disclose Process: Repairs Required

A common theme among senior finance executives and subject matter experts regarding the close-to-disclose process has emerged. Many large organizations, particularly those that have significantly grown globally over the past decade, could stand to improve in one or all of the following four areas:

  1. Take less time to gather and process financial data.
    Many finance professionals want tools and methods to help minimize the time it takes to assemble, reconcile, and consolidate data so that they have more time to analyze and understand the financial results driving performance. Oftentimes, many large organizations are burdened by the number of entities and secondary systems that need to be consolidated during the close-to-disclose process, thus increasing complexity while reducing both process efficiency and cost effectiveness.
     
  2. Use automation to boost process effectiveness.
    Software solutions for the close-to-disclose process have matured over recent years, and some can automatically handle key processes that were previously handled manually, such as variance analysis, journal entry processing, and close scheduling. Automating more process steps, especially in the close-to-disclose process, will continue to boost process effectiveness.
     
  3. Identify the root causes of accounting and reporting errors and reduce the risk of restatements.
    With the increasing number of reporting and disclosure requirements from governmental regulatory bodies and the rising cost to fix errors and restate financials, CFOs are right to be more concerned about getting the numbers right the first time. Even enterprise-wise ERP systems and consolidation tools continue to rely on error-prone, Excel-based manual processing. The key is to make sure there are no discrepancies between the data that is coming out of core financial systems and data that is recording and reported in the financial statements.
     
  4. Strengthen alignment between the data used for regulatory reporting and the data used for planning and resource allocation by internal profit-and-loss owners.
    CFOs and senior executives working at large, complex organizations are seeking better governance models that ensure financial reporting performance is accurately measured and tracked consistently across the enterprise. By aligning financial data and operational metrics in terms of performance reporting, the quality of information used by internal decision makers can be improved upon.

For more information on the last mile of finance, see APQC's free white paper on Fortifying the Close-to-Disclose Process.