My last blog (Here, There and Everywhere: Business Intelligence on the Go) discussed how Companies can use Oracle 'Business Intelligence on the Go' tools to improve visibility into real data from almost any location in the world using little more than a cell phone. The response was very positive, perhaps owing to the fact that it had a Beatles theme to it. Fun, full of sunshine and hope, and providing answers to questions that many had pondered for seemingly forever, they and the article, was well received. After all, who doesn’t like the Beatles?
My “sequel” to that blog, if you will, discusses a much more intimidating area: that of stressed out Accounting Departments, discussed with the backdrop of a much more intimidating group, Led Zeppelin. Darker, more mysterious and still puzzling to outsiders after all this time, the group provides a fair analogy to one of the more misunderstood departments in a company, Accounting and Finance.
Using the music of Led Zeppelin as our theme, let’s examine some of the ways Accounting and Finance departments can often be considered Dazed and Confused, and then we'll provide solutions on how they can transform themselves, with some help from Oracle Enterprise Performance Management Tools. In little time at all, Accounting and Finance can go from being Over the Hills and Far Away to one a company can rely on to build the proverbial Stairway to Heaven for their operations.
Good Times, Bad Times
While companies have transformed themselves into state of the art operations with regards to communications, technology and level of service, many finance departments have remained stuck in the past, resistant to change or struggling to keep up. Continued use of outdated practices and data collection methods have challenged a finance department’s ability to keep up in times of extreme change.
Trampled Underfoot
An over-reliance on spreadsheets, key employees and/or manual processes has caused a strain in both the input and output of finance departments. Files are emailed or exported to Corporate Accounting, with the primary detail remaining on the site’s general ledger. This limits the parent’s visibility into the detailed transactions.
When the Levee Breaks
Increased responsibilities, decreased headcount and shrinking deadlines have “taxed” the accounting and finance departments to the max. Data for SEC forms are usually manually entered into Word Docs, leading to increased risk of data entry error and/or calculation mistakes. Meanwhile, the time it now takes to prepare and file a regulatory document has decreased by at least 10 days in the past eight years.
Fool in the Rain
The flow of activity is often disjointed; phone calls, e-mail, and “stop-bys” are often the means by which the close is executed. Stressed out finance departments lead to businesses struggling to just prepare the numbers, leaving little time for qualitative and quantitative analysis. And by the times results are distributed to management, a company may very well be weeks into the next accounting period, reducing the ability to act on the data or be proactive about results.
Communication Breakdown
Too often Finance departments work in silos. One group does not talk to the others, there is little cross training, and too much duplication of effort. Desktop Procedures, if they exist at all, are often vague or limited, reducing an employee’s ability to fill in on other responsibilities when needed. Disconnected processes, disjointed efforts and lack of understanding of where different employees fit in the overall scope of the business can lead to lower employee morale and less incentive to “go the extra mile” for the company.
Ten Years Gone
The Budgeting and Forecasting Process by itself can consume countless months for certain members of the department. Larger or even mid-sized firms with multiple lines of business, products, departments, cost centers and locations can often find themselves needing hundreds or even thousands of Excel templates to prepare a consolidated budget. Often a company will have multiple versions of a budget, Review of these various versions wastes valuable time and blurs the truth of what should be the most realistic budget. And by the time the budget process begins, and budgets are sent out, received back, sent out again, revised, approved, further revised and achieve final approval, months can often pass, leading to outdated or irrelevant budgets, depending on current conditions.
So, these are just some of the areas the lead to accounting departments being the Black Dog of a company. However, as Stairway to Heaven presents itself to be a song of hope, this blog with offer some hope for overburdened Accounting and Finance Departments.
Hey Hey, What Can I Do?
Make full use of automation. Integrate systems to ensure data integrity and reduce manual input, leverage synergies and allow ERP systems to function as designed. Eliminate redundancies. Reduce paperwork, manual entry and duplication of effort while improving shared service, centralization and outsource where feasible (payroll, taxes, collections, IT managed services).
How Many More Times?
Establish deadlines and stick to them. Delays must be strongly discouraged unless absolutely necessary. Due dates need to be adhered to entity wide. If slippage is allowed, this can become a tough issue to remediate. Make sure employees are held accountable to timelines, reporting calendars and management expectations and that missed deadlines must be met.
In the Light
Utilize key metrics or business intelligence to gauge performance. EVA, ROI, AR and AP turns, etc. should be made available to management on a daily, real time basis and used to measure the business. Prepare results and distribute them, ensuring visibility. Organizations with world-class close processes are able to provide graphical, object-oriented, formatted reporting
Bring in on Home
Created and use checklists. Create on-line task lists on which entries/responsibilities/duties need to be performed on which day, and ensure that the list is updated daily. Also, empower your employees. Let them guide the process from steps A-Z, with management there to support and review results as necessary
Nobody’s Fault but Mine
Document policies and procedures. Confirm that there are adequately trained backups at every position, formal policies and desktop procedures for key tasks within the department, and that all job descriptions are updated regularly. This will reduce overreliance on any one individual or group and that at least one other person is capable of performing their tasks during crunch time.
Oracle Enterprise Performance Management Tools
Oracle Hyperion Enterprise Performance Management Tools can help a company to automate its existing processes, remove redundancy in their functions and eliminate manual, complicated processes like intercompany eliminations, consolidation or financial reporting. Who knows, they may even allow time for Dancing Days in the department. Here are some of the highlights of each area.
Hyperion Essbase
· Essbase or "Extended Spread Sheet dataBASE“, a 3D Spreadsheet, developed to address the scalability issues associated with spreadsheets such as Microsoft Excel
· Essbase is a Stand Alone Application to eliminate spreadsheet reporting
· Improves how you “see” the Business. Give employees the ability to “slice and dice” the data.
· Combine multiple sources of disparate data; Analyze summarized data and Do data modeling, “What If” and scenario or predictive analysis
· Accounts love their Excel and Oracle Understands this. Use MS Office to enter, analyze and report on subsidiary data.
· Premium Performance & Optimized Storage; Ease of development, deployment and maintenance.
Hyperion Planning
· A Real time, on-line Budget and forecasting Tool
· Uses Standard calculations and business rules maintained in database
· Workflow feature ensures timeliness of user preparation and management review
· Updates to budgets by user are made in real time, and changes are automatically made to the working budget.
· Email alerts to remind user of deadlines and the notify manager of changes made by employees.
· No set up from budget to budget cycle. Process begins immediately
· Reports automatically pick up new database members (new depts.)
Hyperion Financial Management
· A Real time, on-line Intercompany Elimination and Consolidation Tool
· Multi-Currency Capability with Multi-Dimensionality Features
· Automates Intercompany Accounting and Integrates Data from Most GL Systems.
· Reduces data entry, risk of error and risk of key files located in hard drives or spreadsheets.
· Easier financial consolidation – no need for manual uploads, top side adjusting entries, email of files or transferring of files
· Eliminates need for manual generation of financials. No need for multiple sources/versions of consolidated financial statements
Hyperion Financial Close
· Workflow solution manage the entire close process
· Easily illustrates the current process status and highlights which tasks are at risk or behind schedule
· Automates the Account Reconciliation Process. Controls and manages the specific aspects of reconciliations processing ensures correct preparation and qualification
· Increased collaboration—Advanced workflow features notify users of tasks and enable system wide communication.
· Task owners are notified immediately when predecessor tasks are complete so subsequent tasks can start.
· Easily integrates. FCM integrates not only with Hyperion products but also with your existing infrastructure.
At BizTech, an Oracle Platinum Partner (Highest Level of Certification), we have been implementing and improving clients Hyperion EPM tools for over a decade. Our Rapid App approach, coupled with experienced accounting and IT experts, can help you implement or improve your financial close process within weeks. Go from being a department than may be considered a Heartbreaker to one that really knows how to Rock and Roll!
Learn more about how to fast track your financial close in my whitepaper.
For more information about how you can use Oracle EPM Tools to simply your Budgeting and Closing process, contact BizTech, and Oracle Platinum Partner, at 610-592-0600 or email me at timsimkiss@biztech.com
