Optimizing the Last Mile of Finance
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Optimizing the Last Mile of Finance

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These speakers offer a roadmap for continuous improvement and a case study from Dr. Pepper Snapple Group

These speakers offer a roadmap for continuous improvement and a case study from Dr. Pepper Snapple Group

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Optimizing the Last Mile of Finance Optimizing the Last Mile of Finance Presentation Transcript

  • Optimizing the LAST MILE of FINANCE“Optimizing The Last Mile Of Finance”Margaret Kelly, CPAFinancial Solutions, TrintechGavin BackosKPMG Advisory ServicesAngela StephensSVP, Controller-Dr Pepper Snapple Group www.trintech.com
  • Agenda• Introductions• Last Mile of Finance Transformation – Gavin Backos, KPMG• Roadmap for Continuous Improvement-Margaret Kelly, Trintech• Case Study from Dr. Pepper Snapple Group: challenges and solution for account reconciliation process-Angela Stephens
  • Last Mile ofFinance Gavin Backos March 9, 2012
  • Finance TransformationHow different Firms define Finance Transformation In today’s market, finance functions are under increasing pressure to improve performance. Source: Ernst & Young Web Site Finance Transformation is defined slightly different, but ultimately it is all about efficiency, effectiveness and change© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms KPMG – Last Mile of Finance 4affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL 4
  • Technology enablers for the Last Mile of Finance (Record to Report- R2RProcess)Technologies enable various layers of effective control and execution throughout the R2R process. Close and Reporting Cycle Account Reconciliations Time to Time to Close Time to Report Close Cycle & Consolidate Task Management Procure to Pay General Ledger Internal Close Reporting Transaction Matching & Operational Reconciliations Order to Cash Consolidation External Process Reporting Variance Analysis Fixed Assets Non-Financial Information Regulatory Payroll Consolidation Management Reporting Governance Journal Entry Management Organization and People (Roles and Responsibilities) External Financial Reporting & XBRL Policies and Procedures Information Systems and Technology Compliance & ERM© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms KPMG – Last Mile of Finance 5affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL
  • Define the Last Mile of FinanceUnderstand what creates value and how to mitigate Risk Improve the close and reporting cycle while reducing Financial Statement Risk Close Operations and Reporting Cycles Time to Time to Close Time to Report Consolidate Users Stakeholders General Ledger Internal Reporting Local/Group GAAP Company Transaction Close 2 Processing Consolidation Reporting Plans, Strategy External Reporting 4 Process Budgets, and Non-financial Reporting Information Regulatory Reporting Forecasts 1 3 Strategy & Management Requirements Governance Information Performance Organization and People (e.g., structure, roles, and responsibilities) Other External Management Reporting Process (e.g., policies, procedures, controls, operations & chart of accounts) Information Systems/Technology 1 2 3 4 1. Transaction processing 2. General ledger close 3. Consolidation process 4. Reporting and analysis  Eliminate delays through auto  Enthusiastic & Qualified people  Use technology to accommodate  Clearly defined reporting strategy scheduling and removal of manual  Rigor & discipline – comprehensive complex legal structures tied to overall company strategy interfaces close calendar & checklist tied to  Automate data integration  Leverage ERP, Business  Tighten up cut off procedures documented process, policy, &  Standardize all chart of accounts Intelligence tools, & ODS/DW  Address data integrity with more controls  Set a robust and disciplined Inter-  Spreadsheets used for presentation effective validation processes  Only necessary manual JE’s company process & policy and delivery ONLY  Interface validation and monitoring  Implement automatic and detective  Eliminate non-standard  Tighten up all data sources and  Create an Operational Close controls consolidation adjustments store in an ODS/DW process  Automate & standardize  Integrate disclosure data  Actuals, Budget, & Forecast data  Robust SLAs with IT reconciliations requirements with the COA or data centrally stored and harmonized collection process© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms KPMG – Last Mile of Finance 6affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL
  • Creating valueThe cost and value of financeStreamlined end to end processes are more efficient and effective. The cost of Finance will decrease, the value Finance provideswill increase, and the perception of Finance will improve. Business Financial Support Lower total cost of Finance Deliver Organizational Value  Business Finance Business & Financial  Corporate Finance Analysis  Decreased Cost Transaction  8 day Financial Statement Close Processing/Controls & Compliance Accounting Operations Transaction  Transaction Processing Areas Processing/Controls &  End-to-end Cost Decreases Compliance  Optimized Integration Current State Future State© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms KPMG – Last Mile of Finance 7affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL
  • High Quality in the “Last Mile of Finance” is designed to help deliver … Greater Efficiency Reduced Financial Statement Risk  Reduction of low value-added work  Transparency of financial statements to close  Reduction of work duplication activities and vice versa  More efficient task hand offs  Ensures Completeness  Increased use of automation  Must be Accurate  Reduction in manual journal entries  Enhanced ability to identify and correct errors Shorter Cycle Time  Reduction in time to close books  Time to focus on higher value added activities  Improved speed of information delivery to the business  Enhanced leverage of system functionality Enhanced Controls Reduced Complexity  Enhanced enterprise-wide close process  Reduction of complexity through global process coordination standardization  Greater reliance on preventive rather than  Greater visibility of close process detective controls  Integrated and shared close calendar  Corrections of errors moved closer to the “source”  Appropriate setting and consistency of materiality  Clearer definition of roles, responsibilities and thresholds segregation of duties  Documentation and training on the close process  Documentation of policies and control procedures … which can help result in more time for finance to add value to the business© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms KPMG – Last Mile of Finance 8affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL
  • Optimizing the LAST MILE of FINANCEOptimizing the Last Mile ofFinance-roadmap for continuousimprovementMargaret Kelly, CPAFinancial Solutions, Trintech www.trintech.com
  • Last Mile of Finance Process Timeline 10Q Filed; Week -1 Week 1 Week 2 Week 3 Week 4 ER PublishedGeneral Ledger ClosedReconciliationsConsolidationsFinancial Statement AnalysisController & CFO ReviewsDrafting of SEC ReportDrafting of Earnings ReleaseDisclosure Committee MeetingCEO CertificationAudit CommitteeOutsourced XBRLFiling GL Closed Distribution of Drafts Week 4-5Internal Controls Review(ICFR)
  • The Last Mile – Resource Optimization 1 - Eliminate manual work 2 – Evenly distribute the work load a) Right first time – reduction of corrections Moving activities from the peak performed during peak load load enables cost reduction and b) Automation - cost reduction if the targeted reallocated time to improve quality activity is performed during the peak loadWorkLoad 2 1 2100% Cost 80% Reduction February March Address bottlenecks to Improve Quality and Increase Efficiency
  • Last Mile of Finance Maturity Model Efficiency, Transparency, Quality Sprint Run Fully-Automated & Optimized • Best practices • (Automated) Walk Semi-Automated preventive controls Process embedded into • Semi-automated business process Manual Process • Consolidated view into controls Crawl Improvements • Point solutions for close & reporting • (Manual) detective collaboration (e.g. process controls & procedures SharePoint), process • Fully integrated with • Manual process XBRL, close, exception Manual Cost of Finance, Risk management and improvements compliance mgt, reconciliations, Processes • Legacy apps and compliance • Lack of controls across• Disjointed processes • Heavy spreadsheet • Automated and data streams• Legacy apps use collaborative global • No single view into• Heavy spreadsheet • Email, Word, shared workflow close and reporting use drives • Real-time process process• Email, Word, shared optimization drives
  • Software solutions for Record to Report (RtoR) Optimizing the “Last Mile” of FinanceTransactional Regulatory Systems Authority Reduce the Cost of Finance as a % of Revenue
  • Production Platform ensures process discipline PlanScope,Schedule Report Repeatable Sustainable Perform Manage Monitor/Record14: Transparent
  • Universal Oversight of the Last Mile
  • Entity Hierarchy View
  • Close Calendar Management
  • Pro-active, scheduled delivery of tasks18:
  • Integrated Last Mile of Finance Timeline 10Q Filed; Week -1 Week 1 Week 2 Week 3 ER Week 4 PublishedGeneral Ledger ClosedReconciliationsConsolidationsFinancial Statement AnalysisController & CFO Reviews ShortenedDrafting of SEC Report CycleDrafting of Earnings Release andDisclosure Committee Meeting CostCEO CertificationAudit Committee SavingsIntegrated XBRLFiling GL Closed Distribution of Drafts Week 3-4 Internal Controls Review (ICFR)
  • Software Solutions For Those Who Seek To….Institutionalize financial best practicesCentralize close tasklist, updated real-timeas work is performedSelf document controls during executionIdentify, escalate, and track issues throughresolutionAchieve fully documented, paper-less closeprocess from record to reporting
  • Angela Stephens,Senior Vice President – Controller
  • Overview • #1 Flavored CSD company in U.S. • One of the top 3 North America LRBs • Key brands include: DP, 7UP, A&W, Sunkist, Canada Dry, Crush, Hawaiian Punch, Mott’s and Snapple • Revenues of $5.9 billion; Market Cap $8.4 billion – FY 2011 • Approximately 19,000 employees in 150 principal locations • Centralization began in 2004 DPSG • Current portfolio includes: Master Data, Customer Trade Accounting, Shared A/P, A/R, Fixed Assets and Cash AccountingServices • Genpact is 3rd party outsourcer - located in Delhi and Hyderabad, India Center • 335 Total Employees (208 DPSG / 127 Genpact) • Main locations are Delhi, India and Plano, Texas
  • DPS last mile of finance challenges… Need to eliminate manual processes that are risk prone and time consuming – AssureNet will:  Automate the retrieval of account balances and activity, speeding the closing processes (today it is all done manually in Excel spreadsheets)  Improve data accuracy – not only will the reconciliation process be faster, the accuracy and validity of our current process in Excel is time consuming  Allow us to transfer time spent on transactional work to more analytical procedures Need to improve data access – With AssureNet:  Data is stored centrally, allowing us to access it quickly and securely – Now it is maintained in our shared drives maintained by multiple business units  Internal and external auditors can be given access to all or select accounts eliminating time-consuming “hand-offs” occurring now Improved Standardization – With AssureNet:  Allows multiple ledgers to perform reconciliations consistently – some reconciliations are standardized but opportunities remain  Templates can be customized to meet DPS needs from variance reporting to risk analysis
  • DPS last mile of finance challenges… Need for enhanced workflow/task management – With AssureNet:  We will be able to have visibility to the status of reconciliations throughout the process - increasing accountability throughout the organization eases compliance monitoring and creation of report statistics for KPIs.  Automated routing/notification of completed reconciliations to the reviewer  Roles and responsibilities around reconciliations will no longer need to be manually documented in Excel matrices – a well-defined user data base is maintained. Improved Compliance and Risk Management – With AssureNet:  Highlighting risks and opportunities within the balance sheet will no longer be reliant on manual processes – and can be standardized.  The certification capability will allow us to define rules within accounts prior to sign-off.  Dynamic risk ratings will allow us to continuously monitor our accounts as the balance and other drivers change – balancing workloads where the risk is, versus lower risk accounts
  • Questions Questions from the audience? Speakers: • Margaret Kelly – Trintech margaret.kelly@trintech.com • Gavin Backos – KPMG gbackos@kpmg.com • Angela Stephens – Dr. Pepper Snapple Group