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As global events and the accelerated pace of change place even more pressure on today’s CFOs to provide strategic guidance at high speed, financial leaders worldwide know they have to ramp up their technology transformation if they want to compete and thrive.

As global events and the accelerated pace of change place even more pressure on today’s CFOs to provide strategic guidance at high speed, financial leaders worldwide know they have to ramp up their technology transformation if they want to compete and thrive. 

A 2021 Accenture report revealed that costly decisions are happening at a cadence never before realized. In previous years, enterprise CFOs might make monthly or quarterly decisions equating to $100 million. Today that number is closer to $1 billion—and it’s happening daily. 

In all industries, companies are taking steps to establish a more agile and informed decision making environment. CFOs are increasingly empowered to identify growth opportunities, fund critical initiatives, manage spend, reduce costs, and continuously assess internal and external risk. 

One way they’ve achieved this is by automating traditional financial tasks. In a similar 2018 Accenture survey, participating financial leaders said that 34% of their tasks were automated. This year, that number has risen to 60%, significantly outpacing the 2018 prediction of 45%. 

While these are necessary steps toward digital transformation, outdated accounting and finance systems still tether teams to siloed data, disparate systems, and slow and laborious timelines, keeping them from operating at full velocity. Even with a predictive, cloud-based planning solution, outdated ERPs can diminish the richness and drillability of data, degrading potential plans and creating unnecessary hurdles.

That’s no way to run a business, at least not anymore. An agile organization demands a dynamic and agile financial and planning environment. To achieve the business agility needed to compete in today’s landscape, CFOs need to harness the data and insights to help them plan quickly, effectively, and comprehensively.

Because plans are only as good as the data they’re built on.

A modern close leads to better predictions

To build better, more accurate plans and more predictive scenario models, planning teams need richer insight. But manual, broken close processes stand in the way. A traditional close process is hampered by inefficiencies, clogging up planning downstream and preventing comprehensive and scenario modeling. A fixed accounting key, for instance, may be a bedrock part of your record-to-report process, but it’s designed to strip away data and dimensionality—robbing you of the insight you need to plan predictively. Moving data from system to system, cumbersome and excessive reconciling, and repeated summarizing all conspire to erode valuable accounting data. Accounting and FP&A teams, as a result, can find themselves at odds, having to make educated guesses or swim back upstream to uncover answers.

KPMG recently underscored the importance of a digital, modern close by issuing a call to finance leaders to “transform the monthly record-to-report (R2R) close process so that it aligns more closely to the strategic forecasting needs of the organization.” 

The message is clear: To remain relevant and effective, the close process must evolve to be smarter, more efficient, and more automated.

Establishing a data hub is critical for business agility

Before overhauling the close process, companies need to lay some important groundwork. Swift and successful transformations of legacy functions demand the presence of an intelligent data foundation: a single source of truth to ingest, enrich, and transform data, all connected to the system of record. 

Establishing a unified data hub provides a consistent way to look at all financial, operational, and historical data from previously disparate, siloed systems. Rich, real-time dimensional data allows users to better understand business performance, dissect budget vs. actuals, and interrogate trends and insights. And as changes occur in the data hub and to business processes, they’re immediately reflected downstream so accounting and FP&A are always working from the latest information.

Once an intelligent data hub is up and running, modernizing specific functions (like the close process) gets easier.

Uncovering the why with a data-powered close engine

The power of a modern close benefits an array of functions in finance and FP&A. Take Workday Adaptive Planning, for instance. This modern, predictive planning platform serves both accounting and FP&A (along with all the business functions they serve) with the ability to plan, forecast, and model virtually any aspect of the business. But when that planning system must interoperate with outdated ERP platforms, its ability to connect plans with underlying data is limited. And the potential ROI from that planning investment is limited as well.

Luckily for those FP&A organizations, Workday Financial Management, a modern, cloud-based alternative to traditional ERPs, knocks down those barriers by allowing finance and accounting teams to access the same intelligent data foundation. Integrating automate-as-you-go into each translation, Workday simplifies the close process, making it faster and more accurate. Each transaction retains detail and dimensionality, so teams can double-click into the what and the why by viewing real-time contextual data and insight. 

This driver-based, continuous planning environment establishes a rich data hub for deeper and faster insight, powering better decision making, and ultimately reducing friction and increasing collaboration among accounting, FP&A, and stakeholders throughout the business. 

Variance analysis made simple

For a closer look at how a smarter close saves time and improves insight, let’s dig into a use case. If the mere mention of “variance analysis” evokes shudders, you’re not alone. Historically, variance analysis is a painful and difficult task for both accounting and FP&A teams. The reasons for this are varied: The teams often work from two versions of the truth (in two different systems); FP&A has questions accounting isn’t ready to answer; and the data needed to identify the gaps or activities that caused a variance frequently is lost through the close process. 

Think about that: The very process of going through a close results in lost data. 

Workday Director of Accounting Patrick Hoynes recalls what traditional variance analysis was like at a previous employer. “Amazing company with amazing people, but we really struggled with getting to the why quickly.” With different subledgers and subsystems that fed into separate consolidation systems, drilling into discrepancies was a slow process. “We also had people reporting from 40 countries around the world. It was really difficult for us to be able to get to a very quick answer.”

What’s the answer? A single, shared data model. Workday Financial Management brings into a single system both the accounting team’s revenue vs. actuals and the planning team’s budget. Teams can drill down into the same data to uncover the reason behind a delta or missed forecast and define a solution that makes sense for both teams. This integrated planning and finance environment gives people access to the right data at the right time. And that results in better reporting, predictive scenario planning, and more strategic, data-driven recommendations.

Spend your time in action

Close processes don’t have to be linear, reductive, and highly manual. If yours still is, then it’s hobbling your ability to get the most from your cloud-based planning environment. You now have the ability to transform the close process with automation, real-time visibility, and the complete data needed for teams to do their work quickly, efficiently, and without the confusion and rancor that once defined every close. Accounting can close with confidence, and FP&A can plan with more predictive foresight. 

Take it from the lived experience of one who knows how an outdated close compares to a modern one, and what it means for finance and FP&A teams. “We’d be sitting on a lot of Zoom calls and playing a lot of telephone tag trying to understand what happened, when, and how,” recalls Hoynes. “We don’t need to do that now. We can really spend our time in action.”

On-demand webinar: When Old ERPs No Longer Cut It

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