Robert Kugel's Analyst Perspectives

The Virtues of Automating Reconciliation

Posted by Robert Kugel on Mar 29, 2014 8:40:50 AM

Reconciling accounts at the end of a period is one of those mundane finance department tasks that are ripe for automation. Reconciliation is the process of comparing account data (at the balance or item level) that exists either in two accounting systems or in an accounting system and somewhere else (such as in a spreadsheet or on paper). The purpose of the reconciling process is to identify things that don’t match (as they must in double-entry bookkeeping systems) and then assess the nature and causes of the variances. This is followed by making adjustments or corrections to ensure that the information in a company’s books is accurate. Most of the time, reconciliation is a matter of good housekeeping. The process identifies errors and omissions in the accounting process, including invalid journal postings and duplicate accounting entries, so they can be corrected. Reconciliation also is an important line of defense against fraud, since inconsistencies may be a sign of such activity.

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Topics: automation, close, closing, Consolidation, Controller, effectiveness, process management, reconcile, Reconciliation, report, XBRL, Governance, Risk & Compliance (GRC), Accounting, Business Performance Management (BPM), CFO, Data, Document Management, Financial Performance Management (FPM), Financial Performance Management, FPM

Using the Close as a Finance Department Diagnostic

Posted by Robert Kugel on Dec 7, 2012 11:12:59 AM

Earlier this year we published our Trends in Developing the Fast, Clean Close benchmark research findings. The most significant was that, on average, it takes longer for companies to close their books today than it did five years ago. In 2007, nearly half (47%) we closing their quarters within five or six days, but now only 38 percent can do it as quickly.

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Topics: close, closing, Consolidation, Controller, effectiveness, process management, report, XBRL, Accounting, Business Performance Management (BPM), CFO, Data, Document Management, Financial Performance Management (FPM), Financial Performance Management, FPM

The Financial Close Measures CFO Effectiveness

Posted by Robert Kugel on Jul 2, 2012 11:07:18 AM

What’s a fast, free and reasonably reliable way of gauging the effectiveness of a finance department’s management? It’s the number of days it takes it to close the books. Companies that take six days or fewer after the end of the period to close their monthly, quarterly or semiannual accounts demonstrate a basic level of effectiveness that those that take longer do not. In my judgment, finance executives should regard a slow close as a negative key performance indicator pointing to less-than-effective management on their part. I draw this conclusion from our recent benchmark research, which  followed up similar research we completed in 2007.

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Topics: close, Consolidation, Controller, process management, report, XBRL, Business Analytics, Governance, Risk & Compliance (GRC), Accounting, Business Intelligence (BI), Business Performance Management (BPM), CFO, Data, Document Management, Financial Performance Management (FPM), Sales Performance Management (SPM), Financial Performance Management

Consolidation Software Is a Key to Faster Closing

Posted by Robert Kugel on May 10, 2012 9:41:09 AM

For at least a couple of decades completing the financial close within five or six business days after the end of the period has been accepted as a best practice. As such, that creates an expectation that finance organizations that take longer should work to reduce their closing intervals. In updating our last benchmark research on the closing process, Ventana Research has found this not to be the case. In fact, the latest research shows that many companies are taking longer to close today than they did five years ago. Whereas nearly half (47%) were able to close their quarter or half-year period within six business days back then, just 38 percent are able to do so now. Similarly, five years ago 70 percent of companies were able to complete their monthly close in six days; today only half can. To be sure, closing quickly still gets lip service: The research confirms that most companies (83%) view closing their books quickly as important or very important. Yet far from demonstrating progress, the results show slow closers are regressing.

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Topics: close, Consolidation, Controller, process management, report, XBRL, Business Analytics, Governance, Risk & Compliance (GRC), Accounting, CFO, Data, Document Management, Financial Performance Management (FPM), Information Management (IM), Financial Performance Management

Data Plays a Key Role in the Close-to-Report Cycle

Posted by Robert Kugel on Mar 22, 2012 9:09:23 AM

Ventana Research recently completed an update to our last benchmark research on the financial closing process. It shows that many companies are taking longer to close today than they did five years ago. Whereas nearly half (47%) were able to close their quarter or half-year period within six business days five years ago, just 38 percent are able to do so in our latest benchmark. Similarly, five years ago 70 percent of companies were able to complete their monthly close in six days; today only half can. The research confirms that most companies (83%) view closing their books quickly as important or very important. Participants acknowledge that they can do better, saying on average that their company can cut at least two days from both the monthly and quarterly closes. Moreover, the longer it takes their company to close, the more time participants think they could save.

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Topics: close, Consolidation, Controller, process management, report, XBRL, Business Analytics, Business Mobility, Cloud Computing, Accounting, Business Performance Management (BPM), CFO, Data, Document Management, Financial Performance Management (FPM), Financial Performance Management