Improving Speed and Accuracy of Financial Reporting

Month-end closes were always a challenge at this $60M Technology Company. Each month end would bring new issues to the forefront exposing weaknesses in the accounting department. The staff was always behind, and the owner was not confident of the number being presented.

Customer Pain Points

There were a lot of effort hours being put into the process and hence the cost of month-end process was high and was consistently delayed.
Accountants would frequently sit late to finish the accounting and hence less time was spent on Reporting & Analysis.
There was a need to improve the quality of the financials and specifically to reduce the number of errors noticed each month.
Wide variance with the numbers that was forecast by the Controller to the leadership

Our Assessment

There was little standardization in processes.
Lots of Organizational Inertia and Reluctance to change.
4 different financial systems with multiple overlapping instances
Numerous last-minute journals and incomplete information
Lack of assisting automation, checklists, and scorecards Methodology Adopted
The first step was to send routine, repetitive work to Acctlytics office in Bangalore. We integrated work efforts in the US with accountants offshore in order to get a 24-hour work cycle and deliver other process improvements.
Next, all the components of the close process were mapped, and a MS Access database was used to automate the process.

The project also involved utilizing Lean Six Sigma principles to map current workflows, reviewing cut-off procedures, Risk based Accrual procedures, Identifying & Eliminating duplication of effort and redundant activities, Re-training personnel, and Benchmarking delivery time and quality.

Results

The company closed its books on the 5th day. The Controller had more time to analyze the results before presenting it to the Senior Leadership and Board. There was a significant reduction in the man hours put into the close process and over 100% reduction in the number of errors. Most importantly, the CFO had full visibility into the close process and could jump in when needed.