How to improve financial close and reconciliation management


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Using new technology, you can now perform your financial close tasks faster while delivering more accurate and valuable information. However, software by itself will not solve problems in your company’s financial close and reporting processes. Governance and business processes have to be re-designed and training and education programs are likely required.

To learn how to work with the four key dimensions of the financial close – people, process, governance and technology – view and share our presentation.

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How to improve financial close and reconciliation management

  1. 1. How to improve financial close and reconciliation management Moving towards the utopian close
  2. 2. Initiatives utilizing new technology can make your organization’s financial close and reconciliation processes be more efficient, accurate and informative. What?
  3. 3. 1. Reconciliation automation from transaction source to reporting line 2. Close management and workflow capabilities, including: • Electronic management of close tasks and schedule • Variance analysis • Manual journal entries • Financial controls • What does financial close and reconciliation management technology provide? Reporting line reconciliation Account balance reconciliation Source / feeder / external files Financial / regulatory reporting Transaction reconciliation Sub ledger GL/ERP Consolidated ledger
  4. 4. By taking on these initiatives, Gartner sees a 25% reduction in close management process costs and up to 20% in reconciliation management. Cost savings Source: CFO Advisory: Last Mile of Finance; Finance and Economics – Gartner (April 2012)
  5. 5. Streamlining the financial close can help mitigate the operational risks associated with running decentralized teams, managing disparate systems and relying on manual processes and spreadsheets. Risk reduction
  6. 6. Installing software will not solve all your close and reconciliation management problems. It also requires governance and process re-design, as well as training and education. How?
  7. 7. Deloitte recommends a four-dimensional close and reconciliation management framework to help carefully plan and execute this implementation work. Technology Governance People Process
  8. 8. • Clearly defined accountability framework • Training material made available policy and procedure, templates and tools) • Global/regional close champions • Appropriate segregation of duties (e.g. separate individuals for reconciling accounts and correcting errors identified during the reconciliation process) • Leading practices People People
  9. 9. • Aligns resource time with high-value activities to effectively use people’s talents • Focuses on analytics and resolving issues rather than reconciliation mechanics and volume • Increases accountability and transparency of the process • Reduces long hours and increased stress levels around period close • Benefits People People
  10. 10. • Centralized/visible close schedule • Standardized reconciliation policies and risk based approach to performing reconciliations • Clearly defined escalation, resolution and approval process • Central visibility to reconciliations and variance explanations • Controlled and transparent intercompany accounting • Accounts adjusted and reconciled during month as opposed to after the close • Leading practices Process Process
  11. 11. • Reduces manual processes and increases levels of automation • Improves process consistency to create efficiency and remove errors • Uses risk-based reconciliation workflow to focus effort in the right places • Reduces processing time and audit cost by ensuring availability of all supporting documentation • Benefits Process Process
  12. 12. • Greater management oversight • Prioritize accounts and deploy resources effectively throughout the close process • Clearly defined reconciliation process to minimize risk of error • Ability to establish, enforce and maintain standard policies and procedures • Active use of dashboards to track close tasks, variances and reconciliations • Leading practices Governance Governance
  13. 13. • Increases overall accountability and transparency • Enhances risk management capabilities • Uses technology to enforce segregation between preparers and reviewers • Improves your ability to comply with laws and regulations • Benefits Governance G overnance
  14. 14. • Automated tools to enable end-to-end reconciliations • Standardized templates by account type • Access to timely and accurate information through robust reporting • Automated matching of transactions • Use of workflow to facilitate close and reconciliation processes • Leading practices Technology Technology
  15. 15. • Automates processes with integration of multiple systems • Automates dashboard and reporting capabilities to provide transparency throughout the close • Automates internal controls to reduce testing • Automates “certification” of high volume/lower risk accounts to reduce user time Benefits Technology Technology
  16. 16. By implementing the appropriate tools and adopting a comprehensive approach and framework, you can transform your financial close and reconciliation management processes to realize clear and substantial cost reduction and risk management benefits. Conclusions
  17. 17. For more information on how Deloitte can help, please visit
  18. 18. Deloitte, one of Canada’s leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte operates in Quebec as Deloitte s.e.n.c.r.l., a Quebec limited liability partnership. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. © Deloitte LLP and affiliated entities. Designed and produced by the Deloitte Design Studio, Canada. 13-3307