Improving the Closing Process: What It Takes

Transcription

1 ADP Lunch & Learn Course Materias Improving the Cosing Process: What It Takes NASBA INFORMATION SmartPros Ltd. is registered with the Nationa Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professiona education on the Nationa Registry of CPE Sponsors. State boards of accountancy have fina authority on the acceptance of individua courses for CPE credit. Compaints regarding registered sponsors may be submitted to the Nationa Registry of CPE Sponsors through its website: ADP has partnered with SmartPros (a Kapan Company) to provide this program and SmartPros has prepared the materia within.

2 segment four segment four segment four 4. Improving the Cosing Process: What It Takes Learning Objectives: Segment Overview: Fied of Study: Expiration Date: Course Leve: Course Prerequisites: Advance Preparation: Recommended Accreditation: Required Reading (Sef-Study): Running Time: Upon successfu competion of this segment, you shoud be abe to: Recognize the benefits from improving the cosing process; Identify the warning signs that the cosing process is not efficient; Identify the five steps that organizations shoud take to improve the cosing process; Recognize best practices reated to the cosing process. Companies are continuay seeking ways to increase the effectiveness of their financia cose process. Not ony must key information be communicated more quicky, but it must aso provide effective support for the business and for the decisions made by management. In our fina segment, DecisionVu's Lawrence Maise shows how improving your accounting cose process can resut in increased financia effectiveness for your entire organization. Accounting March 13, 2018 Update Work experience in financia reporting or accounting, or an introductory course in accounting None 1 hour group ive 2 hours sef-study Improving the Cosing Process: What It Takes By Lawrence Maise, CPA, President, DecisionVu For additiona info, go to: Three Good Reasons to Automate the Last Mie of Finance By Mary Drisco, of American Productivity & Quaity Center (APQC) For additiona info, go to: See page minutes 4 1 VOL. 339/ AUG. 16

3 outine outine outine outine outine Outine I. Issues Surrounding the Cose A. Mutipe Priorities for Finance Organizations 1. Oversight of transactions 2. Management of enterprise performance 3. Attestation of financia reporting 4. Consoidation of financia data 5. Information must: a. Be communicated at a higher speed b. Increasingy support the business needs of and decisions made by management B. Definitions 1. Speed: Infuences what we know and when we know it 2. Agiity: Impacts abiity to respond quicky 3. Data: Provides insight on how best to respond "The key is that peope are the ones that are reay going to be the group that interprets this information and uses it to make smarter, faster, better decisions." - Lawrence Maise C. KPI Management Reporting Process 1. Recent KPI Studies a. Using KPI s wi increase profitabiity by 20% by 2017 b. KPI reporting eads to better performance c. Use of both eading and agging issues D. Maise s Observations 1. Accountants are comfortabe with reporting resuts 2. However, accountants need to begin to ook forward 4 2

4 4 3 outine outine outine outine outine Outine (continued) II. Chaenges of Measuring Business Performance A. Bad News 1. Whie 80% of survey respondents indicate measuring business performance is important 2. Ony 56% said it was being effectivey performed B. Order Processing System Exampe 1. Provides ots of information 2. If deays in cosing, can ead to misinformation 3. Finance function has an important responsibiity for compiance 4. HR systems provide not ony important data about expenses, headcount, etc. a. But Affordabe Care Act has created an additiona set of reguatory reporting i. Organizations need to have on a timey basis to be compiant C. Benefits from Improving the Cosing Process 1. Timey dissemination of information to stakehoders 2. More efficient use of resources 3. Reduction in costs VOL. 339/ AUG. 16

5 4 4 outine outine outine outine outine Outine (continued) III. Benefits of Streamining the Cose A. Continuous Improvement of Cosing Process Provides Benefits for 1. Business decision makers 2. Financia executives 3. Auditors 4. Capita providers B. Earier Access to Data 1. Executives benefit from by having access to data sooner in the cosing 2. Exampe: two companies a. Company A coses its books in 8 days i. Supported by benchmarking studies by other reputabe organizations b. Company B coses their books in 22 days 3. Difference is not just the number of days in the cosing process a. Company A may see a downturn in demand i. And adjust production and inventory eves ii. Leading to increased profitabiity b. Company B might not adjust its production schedues, buids inventory i. Potentiay have write-downs ii. Affect its operating profit C. Cost Improvement Opportunity 1. Top Performer: $2.5 miion savings 2. Ask cients How are you going to spend the savings?" a. Some of it coud be saved b. Some of it coud be invested to run the organization more effectivey D. Eiminating Inefficiencies in the Downstream Processes 1. Deveop targets 2. Understand bottenecks and contributors to fow 3. Identify root causes 4. Make improvements

6 4 5 outine outine outine outine outine Outine (continued) IV. Managing the Chaenges A. Warning Signs 1. HESS syndrome a. Hoidays b. Evenings c. Saturdays d. Sundays 2. Lack of adherence to a documented cosing schedue 3. Use of many manua adjusting entries 4. Feeder systems 5. Accounting buit compicated workarounds 6. Significant empoyee turnover 7. Too many surprises 8. Being reactive vs. proactive 9. High number of kicked-out error transactions B. Bottenecks: Where Do They Come From? 1. Manua processes: 24% 2. Non-integrated systems: 24% 3. Staff shortages: 12% C. Maise s Advice: A Five Step Approach 1. Deveop a charter and achievabe objectives 2. Organize the project team to incude affected functions and compimentary skis 3. Define current and target state cosing process 4. Determine how to improve 5. Institutionaize the improvement using Change Management practices VOL. 339/ AUG. 16

7 4 6 outine outine outine outine outine Outine (continued) V. Going Forward A. Improving the Cosing Process: Questions to Ask 1. Does your cosing activity begin on the ast day of the month? 2. Is there time for anaysis and critica thinking? 3. Is there adherence to your cosing caendar? 4. Are there many journa entries at month-end? B. The Cosing Process: Best Practices 1. Integrated systems/singe instance 2. Adherence to strict deadines and cut-off schedues 3. Onine access to banks, vendors, and other outside service providers 4. Eectronic submissions and interfaces a. Vaidity of number of digits b. Combination edit 5. Begin the cosing schedue before period-end 6. Eiminate non-vaue added processes C. Acceerating the Cosing Process: Making Improvements 1. Redesign the sub-processes for greater efficiency and accuracy 2. Assign accountabiities for meeting agreed schedues and deadines 3. Foster a continuous cuture 4. Manage the change process a. By enabing training, education and other communications D. Acceerating the Cosing Process: Benefits 1. More efficient processes 2. Better returns to sharehoders 3. Timey avaiabiity of management information 4. Better aocation of resources 5. Improved data quaity 6. Better returns to sharehoders E. Key Steps 1. Define your goas 2. Estabish sustainabe working group 3. Prepare reaistic pans 4. Be structured and practica

8 discussion questions discussion questions Group Live Option Instructions for Segment For additiona information concerning CPE requirements, see page vi at the beginning of this guide. As the Discussion Leader, you shoud introduce this video segment with words simiar to the foowing: In this segment, Lawrence Maise shows how improving your accounting cose process can resut in increased financia effectiveness for your entire organization. Show Segment 4. Discussion Questions 4. Improving the Cosing Process: What It Takes You may want to assign these discussion questions to individua participants before viewing the video segment. 1. What are some recent survey resuts reated to business performance? 2. What are some of the benefits from improving the cosing process? How efficient is our cosing process? 3. What are some of the warning signs that the cosing process is not efficient? Do we exhibit any of these signs? 4. What is the five step approach for acceerating the cosing process that Mr. Maise suggests? After paying the video, use the questions provided or ones you have deveoped to generate discussion. The answers to our discussion questions are on pages 4 8 and 4 9. After the discussion, compete the evauation form on page A What are some of the questions that accounting and finance managers shoud ask about their organization s cosing process? 6. What are best practices reating to the cosing process? 7. What are the key steps to making improvements to the cosing process? What shoud we do? 4 7 VOL. 339/ AUG. 16

9 suggested answers to discussion questions Suggested Answers to Discussion Questions Improving the Cosing Process: What It Takes 1. What are some recent survey resuts reated to business performance? Recent KPI Studies v Using KPI s wi increase profitabiity by 20% by 2017 v KPI reporting eads to better performance v Use of both eading and agging issues Bad News v Whie 80% of survey respondents indicate measuring business performance is important v Ony 56% said it was being effectivey performed 2. What are some of the benefits from improving the cosing process? How efficient is our cosing process? Benefits from Improving the Cosing Process v Timey dissemination of information to stakehoders v More efficient use of resources v Reduction in costs Acceerating the Cosing Process: Benefits v More efficient processes v Better returns to sharehoders v Timey avaiabiity of management information v Better aocation of resources v Improved data quaity Based on your organization 3. What are some of the warning signs that the cosing process is not efficient? Do we exhibit any of these signs? Warning Signs V HESS Syndrome V Lack of adherence to a documented cosing schedue V Use of many manua adjusting entries V Feeder systems V Accounting buit compicated workarounds V Significant empoyee turnover V Too many surprises V Being reactive vs. proactive V High number of kicked-out error transactions Based on your organization 4. What is the five step approach for acceerating the cosing process that Mr. Maise suggests? Maise s Advice: A Five Step Approach V Deveop a charter and achievabe objectives V Organize the project team to incude affected functions and compimentary skis V Define current state and target state cosing process V Determine how to improve V Institutionaize the improvement using Change Management practices 5. What are some of the questions that accounting and finance managers shoud ask about their organization s cosing process? Improving the Cosing Process: Questions to Ask v Does your cosing activity begin on the ast day of the month? v Is there time for anaysis and critica thinking? v Is there adherence to your cosing caendar? v Are there many journa entries at month-end? 4 8

10 suggested answers to discussion questions Suggested Answers to Discussion Questions (continued) 6. What are best practices reating to the cosing process? The Cosing Process: Best Practices v Integrated systems/singe instance v Adherence to strict deadines and cut-off schedues v Onine access to banks, vendors, and other outside service providers v Eectronic submissions and interfaces k Vaidity of number of digits k Combination edit v Begin the cosing schedue before period-end v Eiminate non-vaue added processes 7. What are the key steps to making improvements to the cosing process? What shoud we do? Key Steps v Define your goas v Estabish sustainabe working group v Prepare reaistic pans v Be structured and practica Based on your organization 4 9 VOL. 339/ AUG. 16

11 4 10 Sef-Study Option required reading required reading Instructions for Segment When taking an FMN segment on a sef-study basis, an individua earns CPE credit by doing the foowing: 1. Viewing the video (approximatey minutes). 2. Competing the Required Reading (approximatey minutes). The Required Reading for this segment starts beow. Required Reading (Sef-Study) By Lawrence Maise, CPA, President, DecisionVu For additiona info, go to: Over the past decade, the financia reporting andscape has seen significant change. Finance executives face mounting pressure to increase the accuracy of financia reporting, whie decreasing turnaround time. Costs continue to be highy scrutinized. Meanwhie, reguatory agencies have introduced a host of new standards and accounting rues, changing materiaity threshods and requiring detaied schedues and to compicate matters, many finance organizations are being asked to do more with ess. As a resut, today s finance organizations face mutipe priorities that incude the oversight of financia transactions, the management of enterprise performance, attestation of financia reporting, and timey cose and consoidation of financia data. On the one hand, finance departments are aways seeking ways to increase the efficiency and timeiness of their financia cose and compiance processes. On the other hand, not ony must information be 3. Competing the onine steps (approximatey minutes). Pease see pages iii to v at the beginning of this guide for instructions on competing these steps. IMPROVING THE CLOSING PROCESS: WHAT IT TAKES communicated at a higher speed, but it must aso increasingy support the business needs of and the decisions made by management. Within this backdrop, the pace of change in today s business word is increasing and is having a significant impact on the timey, accurate, and usefuness of management reporting. Consequenty, there are severa key competitive essentias necessary to meet these market chaenges: speed, agiity, data, information, and effective decision-making. Speed because it infuences what we know and when we know it; Agiity because it impacts how we respond either internay or externay; Data because it defines the breadth and depth of transactions or events; Management reporting of Information because it is the vehice that faciitates the interpreting of data; and Decision-making because it is the use of that interpretation or insight to drive actions that hopefuy enabe us to achieve operating resuts and profits.

12 4 11 required reading required reading In addition to these essentias, there are operationa considerations and one very critica is the need to Acceerate the Financia Cosing process. Companies regardess of size and industry focus must adopt a more responsive capabiity to manage the compexities of the cose process. Over the years, organizations say that they seem to be drowning in data, but sti starved for information. How do we bridge the gap between the incredibe amounts of data that we have access to, and the optima use of that data to increase business performance? It reminds me of a cartoon that I use in discussions with my cients, as the cartoon iustrates, without interpretation, data is just numbers. We re rapidy entering a word where everything can be monitored and measured. But the big probem is going to be the abiity of humans to use, anayze, and make sense of data. Let me further describe this issue, some confuse business anaytics or big data with insight when in fact having access to data without specific intent and more importanty without a process to integrate into a company s decision management process is of imited vaue and potentiay distracting to effective management and decision-making. More and more organizations are seeking better processes and toos to ensure that the right peope have the right information at the right time, to make faster, better, smarter decisions. One of the toos avaiabe to Finance departments is to adopt KPI management reporting. According to a Gartner study [01/21/2014]: Using KPIs wi increase profitabiity 20% by 2017, key is directiona not absoute percentage; KPIs need to be forward-ooking to aert and guide organizations on the best next action to take. In effect, be integrated into the management process especiay its decision management process Baance among eading and agging measures and use of externa measures to compement interna measures Linkage among KPIs so as to not create conficts and inconsistencies. Additionay, according to a recent IBM survey measuring business performance was the most important chaenge facing CFOs; however, that survey aso reveaed that whie measuring business performance had an 80% importance rating, ony 56% responded that it was being effectivey performed. This is a major performance gap that needs to be improved Improving the Financia Cose Process The financia cose is ike the suppy chain for financia reporting; I use the image of an iceberg, in that the end to end process invoves many financia and operationa systems that are not visibe to the forma financia cosing process. For exampe, order processing needs to cose in order to capture period revenues incuding various attributes such as products, channes, etc. HR systems need to cose and provide other peope reated cost such as company s medica insurance expense, tax expenses, etc. So as one can describe, there are numerous systems that fow into the cosing process and if any of these are deayed or contain invaid data, then the cosing process is at best deayed or at worse inaccurate. And utimatey, consoidation and reporting is misinforming and needs to be corrected. The need for an improved financia cose process can be driven by the desire for a more cost-efficient process as we as the demand from both externa and interna stakehoders for faster, and better quaity, information. But it is aso key to note that, in many organizations, the roe of the finance department is aso under transformation. Not ony must information be communicated at a higher speed, but it must aso increasingy support the business and the decisions made by management. This requires a change in the roe of the finance department from merey provider of information to the roe of anayst. An efficient and fast cose process is key to this transformation. VOL. 339/ AUG. 16

13 4 12 required reading required reading Primary Benefits There are three primary benefits achieved by improving the cose process. These are: 1) Timey dissemination of information to stakehoders Management has faster access to financia information for anaysis and decision making Increase management s abiity to respond to changes in financia resuts Often, acceerating the cose initiatives resut in finding other issues, which when corrected, improve the overa heath of the organization Companies that discose financia information faster than average are giving their sharehoders an 11.2% premium on P/E ratio 2) More efficient use of resources Accounting staff spends ess time on the cose process and is abe to focus on anaysis and panning (i.e. more vaue-added activities and better use of team skis) Creation of a transferabe knowedge base to reduce training time and sustain ongoing governance, risk management, and contro practices over the cosing process 3) Reduction in costs Reduce the cost of interna resources necessitated by a sow cosing process; and Reduce audit fees by eiminating reporting deays and increasing the accuracy of the financia statements. Companies that discose financia information faster than average are giving their sharehoders an 11.2% premium on P/E ratio. For exampe a $3.00 EPS with a 10 P/E ratio is a $30 stock price. With the 11.2% premium on P/E ratio, this stock woud be $ I think their sharehoders woud wecome this premium! Additionay, from a monetary perspective, those companies that cose faster are achieving significant cost saving compared to bottom performers. For exampe, using the APQC benchmark resuts [2014] found that top performing company that cose in 8 days spend 53 cents/$1,000 in revenue ess than bottom performers that cose in 22 days. Thus Top Performing companies with $500 miion in revenues are saving more than $2.5 miion [$500 miion times 53 cents, equas $2.65 miion] because their cosing process is more efficient and effective compared to bottom performers. When I discuss this opportunity with my cients I ask the question: What woud you do with these savings? Many financia executives certainy understand the financia reporting process but need to better understand how improving the cose wi eiminate inefficiencies in downstream processes. The best way to expain this is to take a page out of the 6 Sigma paybook: A structured review of the process ikey wi highight key warning signas such as: What and where are the bottenecks in the current cosing process? n n n 26% are attributed to manua processes; 24% are attributed to non-integrated systems; and 12% are attributed to staff shortage. How many manua entries/adjustments are required during the cose? Hard vs. Soft monthy cose process? Why What are the root causes of the manua entries/adjustments/ and of course reconciiations? What toos are used to automate the cosing process?

14 4 13 required reading required reading What software appication is used to consoidate the financias? What system constraints may hinder acceerating the cose? (For exampe, a saes system may not cose unti day 2 of the next accounting period) Who can be mobiized within your organization to assist in acceerating the cose? These are just a few of the warning signas. Te-Tae Symptoms I often encourage my cients to assess the quaity of their current cosing process because there are te-tae symptoms. Some obvious symptoms such as: Strugging to meeting deadines and cutoffs Lack of documented cosing procedures and caendar Feeder systems have compicated or no automated interfaces with the genera edger system Genera edger system does not interface with the consoidation and reporting systems (i.e., no automated reporting system) Accounting has buit compicated workarounds, spreadsheets and manua reports There is significant empoyee turnover in accounting and reporting Too many surprises (reactive vs. proactive) High number of adjusting journa entries and estimates, especiay manua entries High number of kicked-out (error) transactions The use of process re-design techniques ike 6 Sigma wi not ony identify these symptoms, but aso if done propery, aows us to document the current state process and highights troube spots in contros or inefficiencies, etc. It aso aows us to identify root causes and other changes that wi improve the speed and fow of information and reduce errors and thereby improve data quaity. Additionay, it aows us to monetarize the impact of deays so that the improvement team can quantify cost/benefits and deveop project improvement budgets and timeines that wi deiver rea vaue. Getting Started I use a 5 step approach to get started: Step 1: Deveop a charter and achievabe objectives Step 2: Organize the project team to incude affected functions and compementary skis Step 3: Define current state and target state cosing process (What is/shoud be done) Step 4: Determine how to improve (e.g. eiminate, streamine, automate, etc.) Step 5: Institutionaize the improvement using Change Management practices Recent research [Prosci, Best Practices in Change Management Benchmarking Report ] have found that using effective change management best practices resuted in the foowing: Projects achieved objectives 95%, competed on schedue 71%; however without effective change management practices ony 16% achieved objectives and 6% competed projects on time. I use a question checkist with my cients in order to know how to improve and where to improve the cose process. Some of these questions are beow: 1. Does your activity begin on the ast day of the month? 2. Is there itte time for anaysis and critica review? 3. Does your cosing exceed 8-10 caendar work days? 4. Are manua journa entries used to post norma activity from feeder systems? VOL. 339/ AUG. 16

15 4 14 required reading required reading 5. Are journa entries required for corrections, adjustments, and reporting recassifications in the norma course? 6. Are consoidations competed on spreadsheets? 7. Are intercompany and eiminating entries processed manuay? 8. Are actuas vs. estimates reported for inconsequentia baances? 9. Does your organization use mutipe financia systems that are not fuy integrated? 10. Is financia information inaccessibe through the Web or other eectronic resources? Best Practices Severa best practices that I have seen are: Integrated systems/singe Instance which contribute to data quaity and faster, error free cosings Adherence to strict deadines and cut-off schedues On-ine access to banks, vendors, and other outside service providers Eectronic submissions and interfaces with 2 step vaidations (ETL) Beginning cose before period-end (e.g. soft vs. hard cose, quarter-end vs. month-end) Eimination of non-vaue add processes Lessons Learned Severa key essons earned are: Define Goas, Expectations, and ROE (Return on Effort) Estabish Stakehoder group / Sponsorship Prepare reaistic pans and assembe resources Interna knows organization, cuture, and process Externa knows industry best practices, prior experiences, and objectivity Be structured and practica Quantify Benefits and ROI (Monetize the Improvement) Recognize Risk and Consequences Deveop Impementation and Road Map In summary, one take-away thought reminds me of another cartoon where sodiers with swords fighting their enemy turn away from a gun saesman and say: No, I don t have time to see any crazy saesman. Can t you see I ve got a batte to fight? With the cartoon in mind, my take-away thought is: Acceerating the Cose may seem an esoteric distraction from the day to day business, but it coud be the most powerfu thing you do this year. Contact me to receive the compete checkist: maise@decisionvu.com.

16 4 15 required reading required reading THREE GOOD REASONS TO AUTOMATE THE LAST MILE OF FINANCE By Mary Drisco, of American Productivity & Quaity Center (APQC) For additiona info, go to: Unti recenty, the prevaiing sentiment among CFOs about the financia reporting process was if it ain t broke, don t fix it. That process, often caed the ast mie of finance, invoves a the steps a pubicy traded company must take to cose its books each quarter, perform accounting reconciiations, prepare consoidated financia statements and pubish officia documents that expain performance resuts to the Securities and Exchange Commission (SEC) and the investing pubic. The end-to-end financia reporting process invoves mutipe steps, from cosing the books on ega entities, to reconciiation, consoidation of resuts, anaysis of trends, and reease of resuts. An error at any point on the timeine no matter how sma can resut in a materia weakness designation, intensified auditor scrutiny, and nagging concerns among investors. According to recent research by my organization, the American Productivity & Quaity Center (APQC), many companies are now ooking at the ast mie and concuding it s time for repairs. What has sparked this shift? There s not one big goria of a reason. Rather, three issues have converged to form a papabe argument for change. 1) Last Mie Costs First, the costs of financia reporting are going up, in part because discosure requirements are growing more condensed and expansive simutaneousy. After the financia coapse of , sharehoders and reguators started pushing companies for increased transparency. The idea was that if companies woud te their sharehoders more about how they conduct business, the capita markets woud be safer. The intent was nobe but the outcome was imperfect. CFOs now say they re stuck deaing with reguatory overki, and this is sending the costs of financia reporting soaring. For exampe, companies in the technoogy, teecommunications, aerospace, auto, eectronics, industria and jewery sectors are among those that wi see their financia reporting costs take off as they work to compy with the new rue on confict mineras. Suppy chains wi have to be scoured for offending subcontractors. Auditing teams wi need to certify that confict mineras do or do not exist. Lega bis wi expode as companies scrambe to figure out what they need to say in officia documents. The cost of heedess discosure rues coud be a devastating bow to sma and medium-sized organizations. Another dimension to the cost picture shows that if steps are taken to make the ast mie of finance ess abor-intensive, a company can capture significant savings. For this view, APQC gathered the performance of 148 U.S. organizations with annua revenue greater than $1 biion that took the survey on financia reporting and answered the question about process cost. The resuts were then sorted into quarties. The top quartie is the performance eve above which 25% of a responses occur. The bottom quartie is the performance eve above which 75% of a responses occur. The median is the midde vaue in a set of vaues that are arranged in ascending or descending order. The data shows that the bottom performers spend five times more on the process than the top performers. Surey, this comes as no big surprise. CFOs have known a aong that they coud capture good amounts of savings if they were wiing to invest in process redesign and automation. But unti now, the ROI just didn t seem to outweigh the hasse factor. And the absoute cost itsef, for many, was simpy not binking red in the grand scheme of things. What has turned things around is that the cost picture, when ined up with two other drivers, spes the need for action. Those two factors are: (a) pressure to speed up reporting time; and VOL. 339/ AUG. 16

17 4 16 required reading required reading (b) pressure to ensure the potentia for error is stamped out. 2) Cyce Time APQC benchmarking data shows that when it comes to cyce time, the top performers cose their books, perform a the necessary post-cose accounting steps and pubish officia statements in haf the time it takes the aggards to do the work. Organizations that compete their quartery consoidated financia statements and reease earnings in 10 or fewer days are top performers for this process. Conversey, organizations that compete their quartery cose-to-discose process in 25 or more days are bottom performers. The kicker: APQC anaysis indicates that the top-performing organizations for quartery cyce time tend to spend ess to perform financia reporting per $1,000 in revenue. Why is faster cheaper? Reduced cyce time mean ess time and personne are needed to compete the cose-to-discose process, thus resuting in ower tota reporting costs. In other words, reducing cyce times and minimizing tota cost are ogicay interconnected, and focusing on improving performance in one area wi inevitaby improve performance in the other area. Vendors of software appications that automate the ast mie of finance are quick to point out how their soutions hep to speed things up and bring costs down. For exampe, a we-designed piece of discosure management software wi incude an automated aert system that tes person B when person A has finished her required ink in the chain. Person B cannot get moving unti that has happened. Thanks to the software robot, person B doesn t waste time on hod or pestering person A with emai traffic asking how she s faring. Everybody invoved can do a better job of oad baancing and mutitasking. Moreover, the software maintains detaied status information on each task in the process: who started his task when, who s in process, who competed her task after having to do a makeover and when was that accompished, who competed his task without a gitch, etc. The software orchestrates a potentiay unruy process and heps senior management ensure that in the end it is we-managed. It s not hard to imagine that a we-designed process and a sound software soution coud make the whoe shebang faster and cheaper for, say, the CFO of a fast-growing $2 biion company with more than 20,000 empoyees operating in four countries with four different currencies. 3) Lega Issues The third and fina reason to consider automating the ast mie invoves a CFO s abiity to get a good night s seep that is, without having to worry about accuracy issues. Research from BPM Partners shows that 70% of organizations sti rey on spreadsheet as a data source for performance management and reporting, both interna and externa. That s a big worry when it comes to the potentia for error in officia financia statements. Spreadsheet reiance is a notorious reason why errors are introduced into coaborative processes. In the current era of hyper-vigiance about performance reporting by arge pubicy traded companies, and the punishing pubic impact of missteps in the ream of accounting think of HP s recent woes the reasons to repair the ast mie of finance are manifod.