The financial consolidation process has never been perfect. It’s a time- and labor-intensive process that eats up institutional resources and risks inaccurate or incomplete reporting. Even in businesses with relatively few business units to consolidate, the process commonly takes weeks and creates a lot of disruption and uncertainty along the way.
This has always been seen as a necessary evil. But even when the process was plagued by inefficiencies or inaccuracies, it was considered adequate for most companies. Improving consolidations was a goal, but it wasn’t a priority for many. Unfortunately, it’s about to become an obligation for all.
The Crunch on Consolidations
A survey of financial executives revealed that unparalleled pressures are coming to bear on the consolidation process. Just consider a few significant stats:
- 90% of executives feel pressure to close books faster.
- 61% of executives are unsatisfied with the quality of the close.
- 70% of executives mistrust the numbers at close.
An imperfect process is getting worse because the methods of the past are inadequate for the demands of the present and future. Consolidations are getting vastly more complex as corporate footprints spread through markets, geographies, and regulatory frameworks. Relying on manual processes to manage vast and varied data sets is a losing battle.
Hitting benchmarks on shorter timelines only compounds the challenge. Decision makers depend on consolidated financial data to make crucial strategic decisions. Getting key financial insights ASAP is an obvious priority, and the longer the close takes the more the strategic window closes.
The final factor making this process harder is the fact that financial data has become a key strategic driver. The quality of that data is either an asset or a liability. So even as financial executives are dealing with more data in less time, they also have a mandate to extract the best insights available.
It’s not surprising that so many executives are dismayed by the state of consolidations. Understanding this issue will only get worse is important. Being proactive about finding a solution is even more important.
The Next Generation of Consolidation
The issues with the traditional consolidation process can largely be traced back to the preponderance of manual inputs on outdated spreadsheets. Luckily, those are eliminated by upgrading to an enterprise financial management solution.
When every business unit relies on the same shared platform it’s possible to automate consolidation process. That accelerates the time to close significantly and replaces human error with machine precision. It also enables companies to seamless scale the process up as they add business units and engineer growth.
A next-generation approach to consolidation is possible, and it’s a lot more accessible than what it replaces. You can learn more about why companies are embracing an upgrade by downloading this free white paper. When you’re ready to embrace an upgrade of your own, contact InCloud360.