[IMGCAP(1)]It happens four times a year, like clockwork, and requires intense focus from everyone on the team. If you work in finance at a public company, you know what I’m talking about: the quarter-end close. From that moment on the pressure mounts as team members work hard to consolidate and prepare reports, verify numbers, and meet filing deadlines. And while it may come as a surprise, it’s during this enormously critical time that a modern cloud-based financial management system can make a huge difference.
The classic benefits associated with cloud computing tend to be the elimination of software maintenance, upgrades, and hardware investments. While these are indeed great benefits, the lesser told yet equally important story is how well finance in the cloud can support the team during the financial close process.
More than two years ago, I started using a cloud-based system in my role as chief accounting officer at a public company. Here are some specific benefits we get from the cloud model that directly impact our close cycle:
Real-Time Reporting and Flexibility. Although the term “finance in the cloud” can be used rather loosely in the marketplace, a true cloud-based finance system maintains all data in memory and in one system. Not only does that provide the ability to, for example, post entries across sets of books and perform intercompany entries and eliminations, it also means that in mere seconds, we can consolidate, report and analyze financial and operational data in real time.
Having a current picture of the company at all times helps my team approach the quarter close with a strong understanding of our company’s financial performance, and be able to examine real-time numbers to identify accounting issues and monitor results. We also have a lot of flexibility in report building with our finance system, so we can configure and format boardroom-ready reports. When executives review these reports, they’re looking at data that represents that exact moment in time?not data that was downloaded the previous week or even the previous day. This approach is a quantum leap over legacy, on-premise financial management systems in which data is spread across multiple systems and spreadsheets, requiring all of that data to be manually maintained and reconciled.
Greater Insights. Unlike the legacy systems that were designed 20 or 30 years ago, real cloud-based finance systems were designed from the ground up using modern technology approaches. In addition to core technologies such as in memory data, they incorporate innovations and experiences that have come from the consumer web world, such as the concept of tagging that first emerged with social and photo-sharing sites. In the context of a finance system, tagging lets us categorize transactions for report building and for quick business insights and understanding. For example, a tag can be associated with a transaction at the source, such as tagging a transaction with a specific department, project, employee or customer. If the finance team wants to understand more about that department or customer during the quarter close, it can look up a particular tag and view all revenue and expense transactions related to it.
Better Compliance and Auditing Support. The pace of regulatory change keeps increasing, and finance teams must submit schedules, disclosures and other filings to meet new and changing rules and regulations. A cloud-based system can deliver updates to support these changes regularly and without business disruption, keeping the compliance aspect of reporting on track. A modern cloud system will also offer comprehensive audit trails, making the audit process much easier.
Time Savings. Real-time reporting, greater insights, and better compliance and auditing support all add up to the most precious benefit of all: more time. By reducing the time spent on the required aspects of reporting such as data gathering and reconciling, my team is freed up to focus on more strategic work. For example, we can spend more time closely analyzing results and making recommendations to management that will impact the company’s financial performance in the coming quarters.
Finance in the cloud is about much more than moving software and systems off-site; it’s about empowering finance teams and allowing them to provide better insights to the business. I have no doubt that as more organizations adopt finance in the cloud, it’s going to revolutionize how our profession manages the quarter-end close.
Robynne Sisco is the chief accounting officer at Workday and responsible for the day-to-day management of accounting operations for the financial and human capital management software company.
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