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The Hidden Costs of Legacy Close and Consolidation

Nov. 11 2020 by Luca Giometti, Product Owner - CCH Tagetik

Performance Management Consolidation & Closing

Consolidation is easy to overlook. It’s just there. It works so why fix it? There are other areas to innovate which beg for our attention. 

But outdated consolidation processes can be costly. 

And by costly I don’t just mean in terms of time – late nights at the office during financial close for example. No, the various pain points that might be familiar all point to a deeper malaise. They suggest that your consolidation solution is not doing its job. 

The white paper 4 Hidden Costs of Legacy Close and Consolidation reveals the key indicators of a costly consolidation process, the four cost drains of legacy consolidation systemsand how to evolve financial close and consolidation with automation. 

Does any one of the following situations applies to your consolidation system? Monthly or quarterly close takes longer than six days 

1. You haven’t replaced your consolidation software in the last 11 years 

2. Your system requires high levels of customization in any of: allocations; FX/currency conversions; intercompany eliminations, M&A 

3. Your close and consolidation software are divided by point solutions (so one solution for account reconciliation, one for local close, one for reporting etc) 

If the answer is yes, well, maybe you are also familiar with the following symptoms which all point to the same “stuck in the trenches” situation for a Finance team which can’t see that there is a bigger battle to be won: 

  • Slow data processing 
  • Trouble updating for latest changes, perhaps needing IT’s input 
  • Proliferation of side Excel workbooks 
  • Last-minute changes causing frustration 
  • Increasing risk of errors 
  • Overwhelmed with menial tasks 
  • Lack of transparency and analytic tools 

In fact,  legacy consolidation system is like a smartphone which can’t cope with the latest apps, loses battery charge and so on. It works, but at what cost? 

  1. In this whitepaper we put together all the main costs and obstacles suffered by many organizations while dealing, as you are, with legacy consolidation system. Financial statement errors  the chances of accounting errors and misstatements is high when consolidation processes are mainly manual. If the consolidation process is onerous, the chances are it’s erroneous too, chipping away at time, money and reputation. 

  1. Human resources  Spreadsheet-based processes swallow staff time. Without automated systems, the complexity which grows as a company expands can only be addressed by an ever-increasing headcount. And legacy consolidation systems inundate IT departments with never-ending tasks lists. The more you automate, the more you free staff for mission-critical, value-driven tasks. 

  1. Data-less decision making  The C-suite has come to see Finance as a strategic partner, particularly in the current climate. Yet if you can’t be confident of your consolidation, how can you be confident in your analytics, reporting and recommendations? 

  1. Bound to the office in a virtual world  In the blink of an eye we were forced to work from home and move entire enterprises on-line overnight. If we can’t access financial systems in a remove environment, how can we complete our financial processes from home? There is no end in sight to the work from home culture and the agility it requires. Critical, repetitive processes like close and consolation, must be virtualized if for nothing else than the safety and wellbeing of your finance staff. 

Legacy consolidation systems are costing you more than the comfort of using them is worth. Predictive analytics and forecasting are alluring but use of these technologies requires a firm foundation of consolidated data and the human resources available to analyze results. This is exactly what automated close and consolidation promises. And this is exactly what we are equipping our customers with to evolve their financial processes and be ready for the next evolution. 

Read the white paper 4 Hidden Costs of Legacy Close and Consolidation and start to evolve your close and consolidation process now. 

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