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Driving Finance Excellence with Integrated Financial Planning and Consolidation and Close Processes

Financial planning and analysis (FP&A) and financial consolidation and close (FCC) are two critical enterprise performance management (EPM) processes in the office of finance. By having these functions work together effectively, you can improve accuracy, efficiency, and decision-making. This article discusses the benefits of integrating functions in the office of the CFO, the challenges, and best practices for bringing them together. It also highlights tools and technologies that can be used to streamline financial planning and consolidation and close processes.

Benefits of integrating your financial processes

  1. Streamlined reporting and analysis
    A significant advantage of integrating financial planning and consolidation and close is the streamlining of financial reporting and analysis. With a unified process, you can generate financial reports and analyses swiftly and effortlessly. This not only saves valuable time and effort for your finance team but also elevates the accuracy and reliability of financial data, fostering informed, actionable decision-making.

  2. Improved data accuracy
    Another key benefit is improved accuracy and consistency of your financial data. By integrating financial planning and consolidation and close processes, you minimize the risk of errors and inconsistencies that may arise when these processes are handled separately. This ensures the integrity of financial data, leading to more accurate financial reporting and analysis. You can rely on accurate financial information to make better and faster decisions that drive organizational success.

  3. Increased efficiency
    Bringing together financial processes enhances operational efficiency within your finance function. By eliminating redundant tasks and optimizing workflows, you can streamline operations and allocate more time to strategic activities that contribute to growth and profitability. This increased efficiency not only reduces operational costs but also fosters a more productive and motivated finance department.

This integration of processes has the additional benefit of fostering collaboration and communication between your finance department and the rest of the organization. Breaking down silos promotes a culture of transparency, shared understanding, and effective decision-making. A more collaborative approach strengthens your organization’s overall financial performance and strategic alignment.

Common challenges of process integration

The integration of financial planning and consolidation and close processes has common hurdles that must be navigated to be successful.

  1. Multiple data sources
    Prominent among these hurdles is the reconciliation of diverse data formats and structures. Data comes from a variety of sources, including enterprise resource planning (ERP) systems, spreadsheets, and legacy systems. These disparate sources may employ different formats, structures, and levels of granularity, posing significant obstacles to the effective consolidation and analysis of data.

  2. Inconsistent data
    Ensuring data accuracy and consistency across various systems is paramount. Inconsistent data can wreak havoc on financial reporting and analysis, undermining decision-making and eroding the reliability of financial information. To maintain data integrity, it is important to implement robust data governance processes, establish regular data validation protocols, and foster effective communication between the finance team and other departments.

  3. Manual processes
    Manual data transfer between systems is another potential pitfall, fraught with the perils of human error and time-consuming inefficiencies. This cumbersome process often leads to delays in financial reporting and analysis, reducing agility and responsiveness. Automating data transfer between systems can effectively mitigate these risks and significantly enhance the efficiency of financial planning and consolidation and close.

  4. Conflicting time frames
    Another challenge lies in aligning financial planning and consolidation and close processes with differing timelines. Financial planning typically operates on a longer-term horizon, while the close process is laser-focused on short-term financial reporting. This misalignment can give rise to discrepancies between planned and actual financial outcomes, compromising the accuracy of your financial performance assessment.

Critical steps for success

  1. Ensure executive buy-in
    Have an executive team that is committed to the process. Getting buy-in from the C-suite and other key stakeholders is crucial for the success of any planning and close process transformation. Make sure they understand how it impacts your organization’s financial performance and overall success. Ask for input and feedback on process design and implementation. This will help them feel invested in the process and more likely to support it. During the integration effort, keep the executive team informed about the status of the project, the challenges faced, and the successes achieved.

  2. Standardize forecasting
    Standardizing forecasting methodologies across your organization is essential. This ensures that everyone is using the same assumptions and calculations, which makes it easier to compare forecasts and to identify any areas of concern. A central repository for forecast data makes it easy for everyone in the organization to access the same information and to see how their forecasts fit into the overall picture

  3. Automate processes
    Eliminate manual processes in favor of automation, in areas such as cash flow forecasting, budgeting, and reporting. This frees up time to focus on more strategic tasks. Additionally, you can use a task management tool to assign, track, and manage tasks related to cash flow management. This helps to ensure that all tasks are completed on time and that nothing falls through the cracks.

  4. Leverage out-of-the-box functionality
    By leveraging the features and functionality that are already available within cloud-based financial management software, you can avoid unnecessary and costly customization and modifications that can introduce complexity and increase the risk of errors. Take advantage of AI and machine learning, pre-built templates, reports, and dashboards, and use the built-in integration capabilities to connect to other systems and applications. This can save time and effort and ensure that processes are consistent and accurate. Also, cloud-based software eliminates the need for costly hardware and IT maintenance, reducing operational expenses and allowing you to focus resources on strategic initiatives.

  5. Work with an experienced partner
    Integrating processes can be overwhelming. To ensure your integration gets off on the right track and aligns with your overall strategy, it is important to partner with an experienced consultancy that can guide you every step of the way.

Get started today

Argano’s expert consultants guide companies towards financial excellence. Metallus, a leading provider of high-performance metals, worked with Argano to integrate financial planning with consolidation and close processes to achieve greater efficiency. Discover their success by viewing the recent webinar Metallus Optimizes for the Future with Oracle Cloud EPM.

Explore more about how Argano’s enterprise performance management services can benefit your business, or contact us today!