Contact us
Contact us
Previous search terms

    From ledgers to decisions – accelerating closing and consolidation

    Providing accurate information at speed is a foundational responsibility of CFOs. It is also a key business enabler, allowing Finance to effectively support business decisions.

    What may sound simple can be quite a complicated task for larger and more complex companies that require consolidated financial statements. Despite many efforts to improve closing and consolidation processes, many organizations still struggle to provide accurate information on a consolidated basis quickly.

    In this article we explore how to address those challenges, why improving both closing and consolidation is crucial, and what to consider when selecting technology to support Report-to-Record. 

    Roderik Olde Kalter
    Roderik Olde Kalter

    Director, Finance Strategy & Transformation

    KPMG Switzerland

    Konrad Szymanski
    Konrad Szymanski

    Senior Manager, Finance Strategy & Transformation

    KPMG Switzerland

    Understanding the interdependency between closing and consolidation

    Firstly, let us have a look at the the specifics of both closing and consolidation and how they can be supported by technology: 

    • The main objective of a robust closing process is to ensure completeness and accuracy of financial information. This process has been a major pain point for many finance departments due to its cumbersomeness and manual nature. In recent years modern 'fast close’ solutions brought relief by automating high volume tasks (such as: journal entries and reconciliations), and thereby reducing manual and repetitive efforts. Those solutions not only accelerate the process, but also minimize the likelihood of errors, and ultimately improving accuracy of financial reports. 
    • While the closing process is a prerequisite for high-quality financial information, the consolidation process aggregates the data to provide consolidated financial statements. Many organizations are currently using well-established consolidation tools that are nearing the end of their lifecycle. These solutions often struggle with efficiency and flexibility, making it challenging to manage the increasing volume and complexity of financial data. In contrast, modern cloud-based EPM platforms enhance system performance, while being able to handle larger data volumes and support more complex aggregation/calculation logics. At the same time they support financial consolidation and financial planning, based on a unified data model, thereby allowing more efficient and accurate plan vs. actual comparison, thereby enabling better steering of performance. Modern solutions also provide superior capabilities when it comes to visualization/dashboarding, disclosure management and regulatory reporting (e.g., CSRD, BEPS pillar 2). 

    Providing accurate and complete financial data on an aggregated basis quickly ultimately comes down to ensuring that both closing and consolidation processes are well synchronized and performed efficiently.

    This begins with establishing a Global Process Owner (GPO) for Record-to-Report, defining clear roles and responsibilities, reviewing reporting (KPI) needs and the underlying data model, aligning closing and reporting calendars and setting up a controlled workflow with predefined approvals.

    The next step is to understand how fast close and consolidation technologies support this. 

    Process

    Goals and functionalities of fast close and consolidation software

    Fast close and consolidation solutions each serve specific - but complementary - purposes in the month-end reporting process. To fully understand their benefits, it is useful to compare their goals and functionalities and examine how they interact.

    Goals and functionalities of fast close and consolidation software

    Having explored the specific goals and capabilities of fast close and consolidation tools, the next step is to focus on selecting the technology that best aligns with these objectives.

    Selecting the right fast close and consolidation solutions

    Currently, most of technological solutions are focused on providing either fast-close, or consolidation capabilities. With multiple vendors offering varied functionalities, understanding the key selection criteria is essential. Below, we outline important factors to consider when evaluating options to ensure the best fit for streamlined closing and consolidation processes: 

    Selecting the right fast close and consolidation solutions

    How to achieve sustainable improvements

    To cement their positions as business co-pilots, CFOs should provide accurate business insights on a consolidated basis quickly. As we outlined in this article, it’s crucial to have an aligned approach for both closing and consolidation processes. 

    Key steps include:

    1. Streamlining and synchronizing processes
    2. Establishing clear governance
    3. Selecting the right vendors
    4. Implementing effective technological solutions

    By following these steps, companies can establish a streamlined Record-to-Report process that integrates closing and consolidation activities, enforces deadlines through a well-defined closing calendar, and is overseen by a Global Process Owner. Properly configured technology with automated interfaces accelerates the standardized process while enhancing output quality.

    Ultimately, these measures lead to faster closing and consolidation, delivering high-quality insights in a timely manner. 

    Finance Strategy & Transformation

    Your trusted partner for challenging and complex finance transformation journeys.

    Read more
    two colleagues discussing on laptop