Leading Practices in the Last Mile of Finance: Part 1 - Analyze
Transforming the LAST MILE of FINANCEAnalyze:Closing the Performance GAPwithin “The Last Mile”Part 1 of a 4 Part SeriesTheresa Clark – VP, Finance TransformationFebruary 28, 2012 www.trintech.com
Today’s PresenterTheresa Clark – VP Finance TransformationTheresa Clark is a seasoned finance professional with over 20years of finance experience guiding customers in transformingtheir financial processes to improve financial results andreporting. Theresa has been working with major companiesspecifically to address their current compliance, reconciliationand close issues with improvements to their processes andtechnologies. As a former partner of Andersen, LLP, andmanaging Director at BearingPoint, Theresa led projects infinance transformation, financial close improvement and postmerger integration for major companies.Theresa is a CPA and a member of the American Institute ofCertified Public Accountants and the Forum for WomenEntrepreneurs. She earned a B.B.A. in accounting fromGonzaga University.
Who is Trintech? Over 600 industry leaders 26 of Fortune 50 benefitting from Last Mile of 100+ of Fortune 500 Finance solutions
What Does Analyze Address? I. The Last Mile – Quick Recap of the Issues II. The Goals III. Overview of the Transformation Stages for the Last Mile of Finance IV. Analyze – Identify the Performance Gap Plan Scope & Schedule Perform Manage Report V. Self Assessment VI. Where to Start VII. Case Study
The Last Mile of Finance THE BRIDGE TO REPORTING TRANSPARENCY ACCURACY CONTROLS TIMELINESS InformProcure Scopeto Pay Plan Schedule Perform Manage Report Forecast C Budget GL PrepareOrder to Close Group Plan Local Close & & Cash Close Report Consolidate Comply
The Last Mile of Finance Q start Q end 40 + Days -10 days 90 days Recons GL Load Assign & Reconcile & Monitor/Review Report, balances Schedule research /Approve Analyze, Verify Support complete Remind, escalate Operational Recons Performers Load Auto Manage Research & Adjust & Report, Balances match exceptions Resolve Balance Analyze, Support ManagementReviewer/Supervisor Form 10Q 10K Performers Reporting Audit/External Ledger s Import tasks & Schedule tasks Perfor m Monitor Roll forward Prepar e Review Fil e Close + controls Manage Remind issues , escalat Taxonomy Tagging XBRL XBRL e Support Filing in E- Record Complianc Remediat e e Design & Scope Auto Schedule Perform compliance Review & Report & Establish tasks tests Monitor Certify controls Redesign E- Record
What are the Goals of Finance Transformation? Business Goal: An Automated and Standardized Finance Process Confident Streamlined Agile Accuracy of the Standardize and SupportiveFoundational Numbers Consolidate Processes Environment for• Monitor key controls • Focus on value-added activities Enterprise Growth• Enterprise collaboration • Improve service levels • Rapid integration of acquisitions• Better information = better • Train employees faster • Smoother transitions decisions • Automation = more work by • Framework to support new• Isolate and escalate issues rapidly fewer people including SSC’s initiatives (XBRL, IFRS, TAX) Lack visibility into processes Cycle times too long Lack flexibility to absorb Desire for top down Overlapping requirements changes approach Stressed personnel Turnover is disruptive Unacceptable level of risk Uncertain Inefficient Inflexible The Drivers of Change
Last Mile of Finance Maturity Model Efficiency, Transparency, Quality OptimizeTODAY WE ARE HERE Energize Fully‐Automated & Optimized • Best practices • (Automated) Strategize Semi‐Automated preventive controls Process embedded into • Semi‐automated business process Manual Process • Consolidated view into controls Analyze 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
Last Mile OF Finance Leading Practices AssessmentBefore beginning the “Last Mile of FinanceLeading Practices” series, we invite you toevaluate and score your Close process.The white paper has a more detailed set ofquestions that can follow today’s review.
What are the Last Mile Leading Practices?Where does your organization rank in terms ofLast Mile practices?
Analyze: Close Planning The process of planning and administering the close process • Relative to all initiatives, how important is the accuracy, timeliness and cost of the Close process? • Is the global Finance Organization aligned around a PLAN clear set of close goals, risk and deliverables? • Do changes in the management, planning and administrative processes for close cause disruption?
Analyze: Close Scoping and Scheduling The process of determining the nature, timing and extent of close work to be performed • How closely aligned is the establishment of close tasks SCOPING & and timing with the risks assessment and managementSCHEDULING issues? • Are the close scheduling and scoping automatically integrated with the close task list and calendaring? • Are the close schedules and scoping automated so that they are easily changed with new requirements or personnel changes?
Analyze: Close Performance The process of performing the tasks required to validate, adjust and approve final results • Does the close process result in fewer than 5 adjustments? CLOSEPERFORMANCE • Are the financial statements ready for management review in 3 to 5 business days with minimal overtime? • Is the absence of one or a few key personnel during the close process highly disruptive and stress inducing? • Is close a non-event?
Analyze: Close Management The process of overseeing the execution of finalizing financial results • Are the financial results issued with confidence that CLOSE they are non-restateable?MANAGEMENT • Is the close process a driver of people leaving finance? • Is the cost of the close process at a level that is viewed as acceptable?
Analyze: Close Reporting The process of disclosing the financial results to management and third parties • Are the financial reports easily produced? CLOSE • Are financial results delivered in a self-service REPORTING format? • Are changes to reports or new additions easy to absorb? • Are the reports readily accessed with all requisite support when needed?
Self-Assessment Results What step of Transformation makes sense? Self - Assessment Transformation Step• Optimal – highly automated, very → Review Optimize steps to validate efficient and enhance• Effective – making strides but have → Start with Energize steps and create not integrated processes fully momentum with automation• Ineffective – are in the very early → Start with strategize and create a stages and are very manual and plan for change disparate today
Case Study – CME GroupCME Goal: Reduce Pain and Costin CloseCME Group, the world’s leading derivatives “Before using this Lastmarketplace with market cap of $19b, Mile approach, overtimeimplemented a leading practices approach for was the norm.” says John Verburgt, Directorstandardizing their Last Mile process. of Compliance & Controls at CME, “with 45 accountants workingCME’s Finance Group established a single at least four hours of overtime per monthautomated system of all Last Mile tasks, each to close our financials. Now we noassociated dialogues and review notes. They longer incur any overtime costsused work flow and management consoles to associated with the period end, allowing usdetermine if Close tasks were stalling due to to capture greater annual savings.”nonperformance. As a result, they achievedsubstantial annual savings.
Case Study - GoogleGoal – Improved Communications& Issues TrackingGoogle struggled with team communications andtracking Financial Close issues across globaloperations.By standardizing the Close process and linkingClose task dependencies Google: Gained significant transparency across their global processes Reduced days to Close from six to four – a 33% increase in efficiency.
The Last Mile Optimized = New InsightsReporting Readiness Dashboard insight into detail of controls and task by accountClose Design Efficiency Detail of tests and task by line item on disclosure index Over/under evaluating results?BU / Geography Readiness Global Status via collaborationIssues Reaction Time Configurable report for tracking of turn around time on key issuesWork Load Management Ability to shift work load as requiredGlobal Clock Utilization Ability to use full 24 hours to execute task across the globe using workflow and task management
Questions? Thank you for participating. For further information please contact: Hilliary.Opseth@trintech.com (USA) +1 800 416 0075 Carol.email@example.com (EMEA) +44 (0) 207 628 5235 Continue the Conversation – Please register for the second in our new webinar series Part II: STRATEGIZE: Planning Last Mile Automation When: Wednesday, March 21, 2012 Time: 10:30 am Central Standard Time (Chicago, GMT-06:00) 4:30 pm GMT Time (London, GMT) http://www2.trintech.com/l/3242/2012-02-01/b3nb8
Transforming the LAST MILE of FINANCEThank YouTheresa Clark – VP, FinanceTransformation www.trintech.com