Schedule a demo

Financial Close Workflow

Did you ever think that the checklist for performing a financial close would be a much more complex list than a checklist for performing a routine surgery?

The Institute of Finance and Management has a six-page checklist for the monthly close.

TIME magazine quotes a New England Journal of Medicine study that revealed that surgical teams following a 19-item checklist had death rates reduced by nearly half (1.5% to .8%), and had serious complications drop from 11% to 7%.

Although both surgery and a financial close can indeed have an impact on a person’s life, the latter, thankfully, seldom results in death.

Managing a six page financial-close checklist that needs input from many team members can indeed be done via a spreadsheet. A nice workflow diagram can also be set up. These usually work well the first month or two until the players change. Or a new item is added to the checklist. Or, until new complex accounts are added that require a more hands-on approach.

Dictionary.com defines workflow as:
1. The scheduling of independent jobs on a computer.
2. The set of relationships between all the activities in a project, from start to finish. Activities are related by different types of trigger relation. Activities may be triggered by external events or by other activities.
3. The movement of documents around an organization for purposes including sign-off, evaluation, performing activities in a process and co-writing.

A workflow tool is meant to help you manage the processes it contains. Ideally it becomes the framework that holds everything together and does not itself become part of the process that needs to be managed. One of the best ways to establish and manage workflow is via an automated solution.

PWC in its Achieving More Timely, Accurate and Transparent Reporting guidebook recommends an automated workflow solution as a means of improving internal controls and promoting accountability. The other benefits they mention include visibility, a repository, version control and acceleration of the closing cycle.

While there are many workflow solutions out there, there are few that focus on the financial-close process. CIOReview recently explored SkyStem’s financial close workflow technology solution, ART, in its Workflow Management issue.

“Modern workflow technology is entrusted to bring business change and performance improvement. It is enabling management and operational staff to work top down and bottom up to collaborate on delivering services. It is also enabling the users to shape their enterprises in a way of prioritizing areas of focus and see its effect on multiple stakeholders. While bringing all of these advantages to the enterprises, the workflow technology is also becoming easier to implement and use.”

ART is credited with helping companies throughout the world become more vigilant due to its capability “to subjugate the persisting redundancies in close and account reconciliations, and spur enhanced collaboration, insights and built-in controls”.

Similar to the spreadsheet based financial-close checklist, tasks and deadlines are assigned. Unlike the spreadsheet, ART captures signatures and automatically adds in time stamps. Among other things, it sends email alerts to preparers when accounts are ready to be reconciled and to reviewers when a preparer’s work is done. Finally, it holds all supporting documents, which can carry forward, provides a real-time status dash board, and scores reconciliations allowing preparers to improve their work prior to submitting it.

With an automated tool, workflow management is not a task in itself, the tool does it for you as the work is performed.

You can see ART in action via a free financial close automation demo here.

By |2023-03-11T18:07:59+00:00June 20th, 2015|Blog|0 Comments
×