The financial consolidation and close process is as essential as it is painful. During quarterly close, organizations clean up their accounting ledgers, resolve any discrepancies, and create forecasts about their future performance.
Interestingly, the financial close process might be one of the biggest indicators of a company’s health and efficiency. The top 25 percent of businesses are able to get the job done within 12 days – half the time that the worst performers take – and at a cost that’s a mere quarter of what the worst performers spend.
The good news is that a growing number of companies are seeing the benefits of using cloud software for their consolidation, close, and reporting activities. Moving the entire process into the cloud is not only possible; it might be the best decision that your finance department ever makes.
The Steps of Financial Consolidation and Close
1. Ledger Close
During this stage, the company’s accounts and transactions are closed, activity is analyzed and discrepancies, if any, are resolved. The challenges during this phase include repetitive manual work in order to share information between non-integrated systems, as well as the inability to track and prevent recurring problems.
The consolidation phase involves combining the financial data that has been finalized during ledger close and consolidating it using accounting industry standards such as GAAP. Companies may face a variety of issues during this phase, such as the use of multiple currencies, missing intercompany transactions, and the lack of commonalities and inconsistencies between accounts.
Companies must report the outcome of their consolidation and close process to the U.S. Securities and Exchange Commission. However, problems such as lack of flexibility and multiple versions of the truth continue to plague companies while fulfilling their reporting obligations.
The Benefits of the Cloud for Financial Consolidation and Close
By now, the benefits of the cloud are well-known among businesses large and small: cost savings, business flexibility and agility, automatic updates, and freedom from support and maintenance, just to name a few. These same advantages extend to financial cloud software as well.
Traditionally, the financial close process has been conducted with slow, cumbersome methods such as spreadsheets and emails. Moving to the cloud makes it easy for employees across the organization to share, access, and edit the information they need for a quicker close. In addition, the cloud unlocks opportunities for automating many repetitive, tedious activities that greatly lengthen the close process and allows for extensive reporting capabilities for thorough analysis and review.
Oracle Financial Consolidation and Close Cloud Service (FCCS)
As one of the leading providers of cloud enterprise performance management (EPM) software, it’s no surprise that Oracle offers its own solution for financial close in the cloud. Oracle Financial Consolidation & Close Cloud Service (FCCS) is a financial software suite that seeks to decrease the time and effort required for consolidation and close through greater standardization and automating time-consuming manual processes.
FCCS is a comprehensive solution for consolidation and close that includes applications for accounting, integrating financial data, consolidating data, reporting, and tax filing. The software includes end-to-end capabilities for ledger close, consolidation, reconciliation, and internal and external reporting.
By integrating with other Oracle EPM software for planning, budgeting, and forecasting, FCCS enables current Oracle customers to conclude their financial consolidation and close process faster and more efficiently.
EPM applications help measure the business performance. This post will help you choose the best EPM solutions for your organization’s needs and objectives.
Curious about Oracle’s new Enterprise Data Management Cloud Service? Get the full scoop in Datavail’s latest blog post.