Corporate accounting has long been viewed as the custodian of financial data for organisations, regardless of their industry sector. This is according to Sage Platinum Business Partner, ALNET Technologies who says the financial consolidation process of bringing data together, or distributing financial results broadly, has long been an onerous drudgery of information assembly, validation, and reporting.
“The consolidation process for accounting teams, regardless of industry sector, is often measured in weeks or months but rarely in days. Sage Intacct’s modern, cloud solution with open APIs, provides businesses with the connectivity, visibility, and efficiency they need to drive performance,” says Gary Govender, Head of Business Development, ALNET Technologies.
Sage Intacct is the AICPA’s preferred provider of cloud financial applications. It streamlines accounting, while delivering real-time budget vs actual visibility and detailed financial reporting for finance teams.
Next generation consolidations
Govender emphasises that senior financial executives today need to be asking, ‘is my consolidation process a source of value creation or an inhibitor of greater strategic contribution.’ “The pace and complexity of today’s business environment is driving financial executives to shift their fiscal management solution to a system of intelligence, rather than one of record, a critical part of which is access to continuous, accurate, consolidated financial reporting. The most efficient way to approach this is by leveraging a cloud financial management system, this is where Sage Intacct comes to the fore,” he says.
Govender confirms the characteristics of this type of configuration include critical differences between traditional, on-premise solutions, as follows:
- The scalable accounting foundation enables automation. Businesses today are often adding virtual and physical entities to their corporate structures but traditional accounting and finance systems struggle to add these. On-premise solutions cannot replicate the systems and processes for new entities and across geographic districts. However, cloud financial management systems alleviate this shortcoming, enabling companies to add new business units seamlessly and without any additional investments in hardware, software, or configuration.
- Supporting faster growth. Many companies are quickly moving to capitalise on international growth and M&A opportunities. The finance function must be nimble enough to keep up with corporate strategy by establishing books and records that align with the rest of the business. They also need a turnkey solution to get systems and processes rapidly operational in order to generate valuable information to support the myriad decisions that happen at the outset of a new entity. At the same time, those in the corporate accounting group need to roll-up a new entity without missing a beat. Cloud financial management systems are ideal for ramping up new entities. Existing divisions or companies, perhaps with like-businesses, can be used to quickly configure the accounts of report writers that can be used to adapt to meet the different jurisdictional and GAAP requirements.
- Managing the Consolidation Process. A cloud financial management system allows for all consolidation information to be fully integrated at any point in time. Sage Intacct puts all the data of the subsidiaries at the fingertips of the corporate accounting staff. This virtually eliminates the need for the copious emails and other forms of enquiries between those working in corporate accounting and those in the various business units. It also has collaboration, and documentation tools built-in.
- Better insight. Traditional consolidation processes often result in a gap between the originating data and the data inside of whatever system or spreadsheet is used to perform the consolidation. This gap inhibits transparency, limits insight, and creates a time lag between when business activities happen and when they get reported. A cloud financial management system eliminates the gaps between the consolidation and the data. Sage Intacct delivers real-time consolidated financial information to decision-makers at the push of a button. This removes the “black box” of accounting that often arises when the executives must wait several weeks to find out the consolidated financial results, sometimes impeding important resource allocation decisions.
The globalization of businesses. Govender notes this has increased the complexity of preparing and analysing consolidated results. “Foreign currency translation of transactions, balances, and operations is a common point of pain during the consolidation process. Having the ability to choose the reporting currency and pivot the view between looking at the results in the presentation currency of the parent, and the local currency of the subsidiary, helps the corporate accounting group to isolate the impact foreign currency is having on overall financial results.”
Consolidate hundreds of entities in minutes – not days, and increase productivity by more than 50%. He highlights multi-location organisations face complexities, such as decentralised payables, inter-entity transactions, multiple currencies, global consolidations. “Sage Intacct automates financial consolidation activities including currency conversions, inter-entity transactions, local tax reporting and more. This eliminates manual effort so companies can close the books 25%–70% faster and concentrate on growing their business. Now that’s a statistic that should grab the attention of every financial professional facing the onerous chore of consolidations,” concludes Govender.