Creating and unlocking value in an organization starts with knowing precisely where things stand, and where the opportunities for improvement lie. To help, SAP’s Performance Benchmarking group publishes a short analysis each Monday, highlighting hot industry topics and high-impact strategies. This week’s analysis focuses on the impact of better efficiency of closing the books and ways to improve the same, and is written by Rajat Matta.
KEY QUESTION: Are you closing your books efficiently?
KEY TAKEAWAY: The ability to prepare trusted financial statements in a timely manner correlates with the strength of a company’s financial reporting and control systems. It also ensures that finance professionals can communicate the right information to key stakeholders at the right time. Unfortunately, as markets, regulations and competition change rapidly, delivering a streamlined, efficient and high-quality financial close has become a bigger challenge for many organizations.
In particular, according to SAP Performance Benchmarking, many organizations report that they struggle to get a single, global view into what is happening and critical closing data that is scattered across spreadsheets, which makes the financial close cycle harder and longer.
Supporting the finding, our analysis of performance data across industries reveals that a key driver in reducing time to close the books is the integration of financial systems. For example, organizations with integrated systems and processes within the finance function (such as G/L, accounts payable and accounts receivable) as well as outside (such as procurement) close their annual books 37 percent faster than companies that have disparate systems. What’s more, streamlining, automating and integrating finance systems and core finance processes reduces the time to close annual books by an average of 25 percent.
With time savings of that magnitude, organizations have more time for value-added analysis, improved control systems and quality, and faster reporting and statutory compliance.
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Note to ASUGNews.com readers: SAP’s Performance Benchmarking program is a strategic service sponsored by its Value Engineering organization. Originally launched in 2004 together with ASUG as a forum to exchange metrics and best practices, the program today has grown into a global effort and one of the largest such programs in the industry—with more than 12,000 participants from more than 4,000 companies and studies available in 12 languages. Participants receive—free of charge—customized and confidential benchmarking comparisons against industry peers as well as aggregate analyses. To participate in the SAP benchmarking program, visit https://valuemanagement.sap.com.