Find Out The CFOs Key Accounting Process Challenges And How to Resolve Them With Advanced Reconcilia

The simple and yet stubborn accounting process challenge for many CFOs isn’t bound by land or sea: 90 percent of each European and American finance employees in a recent money close benchmark survey reported, they’re fraught for a faster monthly close.

On the other hand, only 28 percent said they really trust the balances carried down which were a result of their financial close process. Moreover, 39 percent reported that they were not satisfied with the financial close process, unbelievable nearly a fifth of European finance departments are without a second approver! -All of these statistics create an ominous omen for the dream of both a fast as an accurate close process, since speed and quality appear mutually exclusive qualities of a financial close.

So let’s have a more in-depth cross-check these all too common financial close challenges faced by CFOs…

Challenge 1: Speed

The pressure on closing faster is harder, since around three-quarters of the 90 percent within the financial close benchmark survey were not able to file their monthly report within the first three days passed the due date. -This shows that the monthly close process is taking longer than needed even without the pressure of closing quicker.

So what’s holding up the process?

In many cases, it’ll merely be the reconciliation process. Adaptive account reconciliation sheets can take days, especially if using a spread sheet approach. As well as taking a long time, manual account reconciliations cause a risk to the reliableness of your reported numbers. Typically, spread sheets accompany a miscalculation rate of between 0.8-1.8 percent – partly owing to human mistakes, partly owing to errors in formulae.

Often the account close process is also held up by the lack of summary of the process and its approval. When you are extremely busy it may be tough to follow-up on approvals requested by the money accounting team, slowing the complete process down and resulting in the monthly close. It absolutely was described quite appropriately by one respondent as ‘a mad dash’. Excel isn’t a lot of help on aspects like these.

So an ideal account close process ought to include speedy and accurate account reconciliation furthermore as streamline the approval process for a timely monthly close.

Challenge 2: reliableness

All financial accounting professionals desire a reliable monthly close, otherwise what’s the point? If you can’t depend on the reported balances carried across being right, then they’re simply make-believe.

But shockingly, seventy two percent of finance employees surveyed do not trust the reported numbers…and it gets worse: when the surveyors compared the opinion of CFOs and front-line financial accounting staff doing the particular reconciliations, it was revealed that just 16 percent of front-line employees trust the reported numbers compared to 30 percent of CFOs and FDs.

But ‘reliability’ doesn’t simply mean trusting that the numbers are correct, it also applies to the entire monthly process.

the survey also found that 19 percent of European financial departments didn’t have a second approver – meaning virtually a fifth of European businesses are leaving the door open for regulative criticism.

An ideal account close process has to give accurate numbers with clearly isolated duties so as to actually meet the challenge of reliableness.

Adramatch are a leading supplier of reconciliation software , get in touch with Adra Match to discuss professional automated reconciliation solutions.