The COVID pandemic changed the way the world runs. For businesses everywhere, this meant getting used to a new reality rife with uncertainty. The need for greater speed in finance and accounting increased. And for many, the right account reconciliation software has become an absolute necessity.
In the first of a three-part blog series, we touched on the value of financial consolidation software to manage through today’s uncertainties. Most notably, how better consolidation, reporting and decision making have become crucial to mid-sized companies’ survival.
In this second article we draw again on Managing Uncertainty with Confidence: An Executive Guide to Financial Consolidation and Reporting including research findings from the consolidation and performance management experts at BPM Partners.
Here we focus on the need for speed among mid-sized companies to thrive in the COVID era. We examine the role that account reconciliation software plays in the process. And we lay out the speed-enabling essentials to look for in selecting the right account reconciliation, consolidation or financial close management software for your business.
Account reconciliation software ensures your general ledger (GL) matches up with your sub-ledgers at the end of every month or reporting period. How? By automating three essential tasks:
Sub-ledgers are internal and external financial records that need to balance with your GL every month. The most common examples that need to be reconciled include:
Often called the bottleneck of the month-end close process, account reconciliations are typically manual-intensive, time-consuming and error-prone. For mid-sized companies, different legal entities, GLs and currencies only add complexity to the process.
What’s more, account reconciliation is typically done with a combination of ERP systems, standalone Excel spreadsheets and external data sources.
The solution? Purpose-built account reconciliation software on its own or - even better - as part of a dedicated financial close management or consolidation solution.
As you consider new financial close, consolidation or account reconciliation software for your business, think about the following speed enablers:
Closing times today have only accelerated.
Before COVID, companies closed their books and reported on them on a monthly basis, sometimes quarterly. Today you may need to close your books on a weekly basis and report on your actuals or cash flow even more frequently. Business conditions are changing week-to-week, so it’s up your finance team to deliver management the information it needs in real time.
Research from BPM Partners shows that ease of use is the number one factor finance leaders use in selecting finance and accounting software. This has been the case for years, but in the context of COVID, it’s even more salient.
For anyone who’s used an enterprise resource planning (ERP) system, you know that ease of use and ERP are rarely used in the same sentence.
Modern consolidation and account reconciliation software works without coding or programming. If you know how to use Excel, you should know how to use your own consolidation software.
Ease of use also benefits teams beyond finance, from subsidiaries to departmental budget owners. Through pre-built calculations, drag-and-drop workflow and plug-and-play templates, the whole business benefits. Ease of use means quicker, more widespread adoption, which ultimately results in faster close times and better business decisions.
Under constantly changing conditions, flexibility is just as important as ease of use. Because regulations, market demands and other factors can change on a dime, you need to be able to adjust your inventory and operations accordingly.
Integrating operational data with your financials not only brings finance closer to the rest of the your business; it means providing a more unified, holistic view of your organization’s past, present and future performance.
As conditions change, the more important it is for you to have real-time, integrated data that goes beyond consolidated financial statements to include operational KPIs - from inventory to customer churn.
In other words, the more data silos you’re able to tear down, the better the picture your finance and accounting teams can inform management to make quick, smart and data-driven decisions.
When it comes to consolidation or account reconciliation software, mid-sized companies face many the same complexities as their enterprise counterparts. They operate in different regions with different currencies, reporting regulations, ERP systems and more.
Growing, mid-sized businesses need the same functionality and power from their account reconciliation software as the world’s largest companies. What they don’t need is the complexity, cost and time involved in traditional enterprise software. One size does not, in fact, fit all.
The good news is that such systems do exist, while still delivering on affordability and ease of use.
As norms change and operational needs develop, you need financial consolidation and account reconciliation software that can grow with you.
In other words, scalability should be high on your radar. Your finance and accounting software needs to scale with your business. It needs to handle new layers of complexity and size as you add more processes and users to the system.
Furthermore, 2020 was also the year where businesses everywhere were forced to work remotely, switching to online operations on a dime. One more reason why, if there was ever any question about the value of cloud-based accounting software, it’s now long gone.
According to BPM Partners, 75% of business leaders stated their preference for cloud-based performance management solutions in 2020. This number is only growing as business leaders appreciate not just the value, but the necessity of cloud-based solutions in today’s business climate.
Giving your business added speed helps ensure that you can survive - if not thrive - as a well-oiled machine in an era of constant change. Here, the right financial consolidation and account reconciliation software is invaluable.
With the need for quicker financial close times and more frequent reporting, fast performance is key. To get there, you need software that’s as easy to use as possible for maximum adoption and quick time to value.
Furthermore, integrating finance and operations will give management a holistic view of your business and provide the insights needed for smarter planning and decision making. Sound reconciliation software also offers mid-sized businesses enterprise functionality, without breaking the bank.
Finally, cloud-based systems are increasingly critical for purposes of security, scalability and performance - and ultimately your company’s ability to thrive in otherwise uncertain times.
Discover how Fluence can help your organization plan better and close faster with more confidence.