For any company that reports its financial performance, the financial close is a critical – and often complex – process.
Critically, the successful completion of the financial close is a regulatory necessity – where failure to provide accurate financial data in good time to create reports can lead to fines and legal proceedings. Even accurate, timely reporting needs to be able to demonstrate a transparent audit trail: regulations such as Section 404 of the Sarbanes-Oxley Act have increased the pressure on internal controls and external auditors. Recently, the SEC took the extraordinary step of barring the Chinese joint ventures of the “Big Four” auditors from working for US-listed companies due to accounting issues, as reported in the Financial Times.
However, an optimized financial close does far more than avoid fines and punishments – it can be a source of significant competitive advantage. Closing and reporting can be significantly and rapidly improved through technology improvements, and deliver immediate returns.
SAP benchmark analysis shows three specific best practices that make a difference:
1.) 32% fewer days to close annual books with no reconciliation necessary for companies with a streamlined and integrated General Ledger.
2.) 45% fewer days to close quarterly books for organization’s where changes in group structures can be processed easily
3.) 29% lower process costs due to a single source of financial and non financial information platform
This SAP infographic has more information on the benefits when businesses close in on financial excellence.