In our previous post, Solutions and Tools to Closing the Books, Part 1, we identified financial consolidation tools and solutions to closing the books to equip your accounting team. In this second part of the series, we dig into powerful data processing and reporting tools.
Open Systems for Integrations
Modern applications can accept a variety of inputs from multiple ERP systems. These integrations can be automated using native and external scheduling tools. In the event of an integration failure, automated notifications can be generated by the tool. If there is a successful data integration, further optional processing is available. Within the application, there are a variety of export options if the data, or even a subset of data, needs to be electronically exported to another system for further analysis or reporting.
Multi-Currency Translations and Processing
You have the ability to import the same data in multiple currencies or import it once in an entered/local currency and have the software perform currency translations. You may load entered (local), functional (entity “operating”), and/or parent (reporting) currency already translated. Additionally, you can load the entered/local currency and let the system translate to your functional and/or reporting currency. These flexible options facilitate consistent data from your source ERP to the CPM solution, if needed. For currency translations, you can enter in average rates, period rates, spot rates, or other custom rates to perform the translations. Translated data can be viewed in any of the available currencies for use by the originating entity for either internal or external reporting.
Today’s applications not only provide enhanced data processing, but also have multiple, powerful reporting options, including:
- Tools to generate and distribute “board room-ready” formatted reports via a host of media including XML, XBRL and PDF (when combined with XBRL, this can allow companies to generate XBRL automated filing of SEC data)
- The ability to export to Excel or leverage Excel-like tools for quick one-off analytical reports and even more structured queries based off financial data
- Additional capabilities that support providing supplemental data such as disclosures required for external reporting
Reduce Risk and Improve Controls
Another core benefit of modern applications is flexible security that limits access based on metadata and/or user responsibilities. Integration to your existing Microsoft Active Directory security provides single sign-on capabilities. Standard workflows facilitate movement of activities that require additional processing for a predetermined process and/or approval once completed. Additionally, the applications provide “audit trails” that show the flow of processing and the users involved for audit or other purposes.
Robust Intercompany Eliminations and Calculation Engines
Software available today can load operating results from multiple disparate ERPs with the available data, or in some cases, augmented data, and be able to eliminate intra-, as well as inter-company, transactions. In some cases, custom elimination rules can be created for unique situations. These eliminations are key to calculating and presenting external reporting.
The calculation engines and processing within the applications can address many processing needs including correctly capturing minority interest ownership, foreign currency translation adjustments, allocations and adjustments needed to prepare financial results in accordance with Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS) and other regulatory agencies. Cash flow generation automation and preparation are also possible, thereby shortening, and making more accurate, this time-consuming activity.
To learn more on how to overcome financial close challenges, you can download our entire guide here or below. Otherwise, stay tuned for blog #5!