New Survey of ERP System Users Reveals Need for Better Tools to Expedite an Accurate Month-End Financial Close
The month-end (or period-end) financial close is no laughing matter for financial professionals. Our recent Excel4apps survey of 780-plus ERP system users from around the world showed that 33% said it takes them five days to close the books for a single period, and another 41% said it takes more than five days. Unfortunately, 85% of the survey respondents—who were comprised of Oracle E-Business Suite (65%), SAP (25%), PeopleSoft (5%) and other system (5%) users—also indicated the ideal number of days to close the books would be five days (40%) or less (45%), as we detail in our infographic.
What Does the Long Close Mean for Finance Teams?
For one, a long financial close means stress and agitation for the finance department, as two other recent surveys revealed. One of the surveys showed that 87% of financial professionals said they worked overtime during the financial close, while the other survey indicated that 60% experienced elevated stress levels. What’s more, after all of the angst, the surveys showed anywhere from around half to three-quarters weren’t 100% sure their final numbers were accurate.
One good thing about knowing your financial close takes too long is that there is obviously room for improvement in systems and processes. Our survey asked what was the biggest area of the close process that needed improvement. Automated financial reporting was the top area, followed by clear definition of processes, more resources and better tools.
The Dilemma of Microsoft Excel’s Role in the Close Process
And what were the ERP system users in our survey actually using for financial reporting? The tried and true Microsoft Excel was listed by 72% of survey participants, and 51% were actually using Excel to manage period-end close processes. Unfortunately, 75% also indicated they spent five or more hours moving data from static reports produced by their ERP system to Excel so it could be manipulated into the required format.
The use of Excel for financial reporting comes with risks beyond that of inefficiency. In a previous blog, we described how report inaccuracies stem from spreadsheet risks related to version control, changes in master data, calculation errors and multiple users, which may be why participants in the other surveys weren’t altogether confident in their final numbers.
The Power of Automation for Finance Processes
According to PwC’s Finance Effectiveness Benchmark Report 2017, “35-46% of time for several key finance processes could be eliminated by automation and eliminating waste” from activities like rework and error correction. The report went on to identify reporting as one of the top four areas where finance teams spend their time that offers room for improvement.
A prime example of wasted time in the reporting process is manually moving data from the ERP system and reworking it in Excel each time a report is created or updated. But, with the finance team’s reliance on Excel for the month-end close, as our survey identified, what are the options for better automating reports? With a current process that involves manual, error-prone human steps to get static data into Excel—most likely due to the inflexibility and unappealing formatting of ERP system reporting tools—a more streamlined approach is needed.
One way to embrace automation, eliminate rework and errors, and preserve the use of the familiar Excel interface is an Excel add-in for financial reporting that links directly to real-time ERP system data. Finance users create their own report templates with an Excel interface that can immediately reflect balance changes during the close reconciliation process. And, as the PwC report identified, “automation doesn’t have to be an expensive, complex, and time-consuming project.” Excel add-ins don’t come with a high price tag and deploy rapidly as an installation rather than a full-blown implementation—and the finance team has real-time data when and where they want it.