By Daniel Camilleri on 2018-01-03
Every CFO wants to improve the accounting consolidation process’ efficiency. We have identified 8 ways to help any CFO in Malta enhance their group accounting.
1. Improve the quality of documents contributed by every individual entity
It’s so obvious that it’s often overlooked. To improve the consolidation of the Group, you need to make sure that the data submitted by each entity is of the highest level possible. As CFO, you will need to analyse the processes of each subsidiary and create a roadmap for process' improvement.
Start this process after you have closed all reporting, at the very beginning (or just before) the new financial year to allow plenty of time for the learning curve and the time it takes to adjust company-wide systems.
2. Saving time along the intercompany reconciliation process
Research shows that the biggest bottleneck when consolidating financial accounting for Groups is the intercompany reconciliation process. It is extremely difficult to manage and is often the cause of substantial delays. Optimising or automating the reconciliation process could be a key contributor to the improvement of close time on the Group financial consolidation.
3. Reduce manual consolidation entries
Reducing the amount of manual input for consolidating entries often results in accelerated financial close. There are many software options available to support the intercompany reconciliation process. However, producing reports in the consolidation software from Excel sheets does not help reduce closing time. This is because the reporting tool uncovers mismatching figures too late into the process, which results in financial executives resorting to manual error correction to resolve mismatched balances and transactions. CFO’s can overcome these challenges by finding a technology solution that offers early reporting and automatic reconciliation.
4. Integrate new entities without putting the whole process at risk
When starting to use the automation, you will need to keep in mind the processes used to onboard new entities and how these can be integrated into existing processes as painlessly as possible. New subsidiaries often have to retain a certain level of autonomy so that the integration causes minimal disruption to the company’s day-to-day running of the business.
5. Reduce dependence on unsupported non-scalable tools like Excel
In order to optimise the whole process, it’s important to weed out, wherever possible, the use of Excel sheets and non-automated processes. If manual processes are kept in place, automated reporting or reconciliation tools should be used to check the data, as early in the process as possible to avoid corrections further down the process line.
6. Update IT reporting tools to account for new analyses or Governmental Reporting required by Law
Update your IT tools to make sure they are compatible with local and international regulations affecting the business. This will assure that the way your reporting is presented will not require annual adjustment when the company needs to make its yearly submissions as required by Law.
7. Coordinate or merge your business and financial consolidation processes
Tweak your business processes and your consolidation systems in a way that they reflect each other’s logic. This will increase the number of people that can easily contribute to and understand the system. It will also reduce human error.
8. Optimise resources and reduce costs
Inject more technology and fewer people into the process. Harsh as this may sound, fewer people means less human error. People are essential in many business processes, but sometimes data crunching is better suited to computers and intelligent algorithms. Look at ways you can optimise your systems by focusing human resources early on in the process to double check the accuracy of the data and use automation software for reconciliations and more complex reporting tasks.