technology, finance functions’ best ally

Rising rates, shortages of raw materials, explosion in energy costs, layoffs within teams… the emergencies of this back-to-school are especially numerous for CFOs.

Because, in addition to carrying out their daily tasks in this difficult context, they are also on the front line to support the company in redefining its fundamental principles and in its sustainable transformation. Colossal challenges in the area of ​​uncertainty and instability, forcing them to sometimes completely rethink their processes, even though the covid crisis had already forced them to adapt.

Among these processes at the heart of the finance function, we find accounting closing. This concerns the stopping of registrations of all accounting entries in the period. It makes it possible to analyze past and current results, implement appropriate commercial and financing strategies in constantly changing markets, but also carry out audits and reporting, forecasts and business plans for various services or financial partners.

This reconciliation of accounts at the end of the period – whether monthly, quarterly or annually – is traditionally a laborious process that can take weeks. But over the years, pressures from markets, shareholders, regulators and managers have only intensified, further reducing the time it takes to produce information for CFOs. Faced with this new situation, how can companies speed up the preparation of their financial statements while maintaining a high degree of reliability?

“Zero day close” or the new holy grail of financial functions

In an economic context with high volatility, increased competition and the race for technological innovation, companies logically want to speed up their accounting closing processes. This approach, called “zero day close”, aims to reduce closing times to a few days instead of a few weeks. It thus enables financial managers to analyze past and current results, to introduce commercial and financial strategies adapted to the market, to carry out highly reliable audits and reports, to prepare business plans for the various parties, the company’s stakeholders and to make quick decisions throughout the company. year without further mobilization of the teams. “Zero day close” therefore allows for faster and fairer decision-making and thus makes the company more agile.

At the same time, quick closing and publication of accounts is seen as a performance indicator by financial partners and investors. A quick and successful conclusion testifies to good financial health and real control over the processes.

The Pitfalls of Implementing “Zero Day Close”

But if “close to zero day” on paper is hailed by companies as it has benefits for financial managers, implementation remains a challenge that needs to be addressed. Such (r)evolution can of course only be anticipated with appropriate technological tools. A conclusion that is shared by many financial departments, since according to a survey conducted by PwC on the priorities of CFOs in 2022, 34% of them believe that automation of processes is prominent.

However, there is a gap between what the CFOs prioritize and the reality on the ground, which can be explained for various reasons. First of all, because although the crisis has been a real catalyst for the digital transformation of the finance function, remote working, manually searching for errors and their corrections represent a significant obstacle to zero-day closure. With strong time pressures, especially during key closing periods, automation is therefore a solution, but it nevertheless leads to changes that the accounting function is not always ready to embrace.

Tech to the rescue for the finance function

However, companies need to overcome this cultural gap and revamp their software environment, because while finance teams continue to feel the pressure to do more, the need to help other departments with decision-making in a changing environment, technology is their best way to complete their tasks and close faster.

By automating closing processes with the aim of accelerating them, companies can move towards a continuous accounting model where automation, control and period closing tasks are integrated into daily operations. The use of new technologies such as machine learning makes it possible to detect irregularities in accounting entries by comparing them with other entries for similar transactions. This allows accounting teams to identify irregularities and correct reconciliation issues as they occur rather than at the time of closing.

This approach aligns the very tight accounting calendar with other business activities, giving finance teams the freedom to spend more time on research and analysis, focus on more value-creating tasks and significantly reduce the margin of error, thereby creating value for the entire business.

The automation of the financial close has thus gone from essential to essential in recent years, as it gives companies and financial managers an undeniable competitive advantage. Conversely, by delaying the introduction of automation or the adoption of a cloud-based financial system, CFOs are depriving themselves of creating more business value and effectively planning for the future. . An increase in financial tools is therefore essential to shift from process management to a forward-looking vision, but also to develop synergies between units that have so far worked in isolation. It is therefore truly a revolution for the information systems, but also for the teams, who have to change their way of thinking.

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