Redesigning the Financial Close Process

Navigating legacy systems and organizational differences to reduce time-to-close for financial reporting after a merger

Project Overview

Following the merger of two large and very different organizations, the resulting global company was plagued by inefficiencies due to legacy processes and systems. One massive issue: it took 19 business days for the company to close the books and prepare financial management reports each month. RevGen was brought in with the goal of significantly reducing the close process by 10+ business days, achieving parity with pre-merger cycle times.

Client Challenge

Nineteen days was simply an unacceptably long financial close cycle. However, the client was drowning in inefficiencies, and needed RevGen’s help to plan and implement a process that would get them to where their goal of timeliness.

Disparate legacy processes and technology

It was difficult to get consolidated financial performance data from the existing legacy applications. This was exacerbated by outdated technology and a lack of integrated processes.

Little collaboration

Like many companies working through post-merger life, the client had several departments used to working in their own silos. On top of that, there were few management frameworks built around the financial close process leading to low levels of collaboration from their highly distributed workforce.

Limited visibility

Many processes and policies were executed without visibility into “why” they were necessary. Team members were only privy to details within the scope of their function and upstream and downstream dependencies were unclear. It was often not until the final days of the close that team members would find out if and when the reporting would be available.

Approach

RevGen knew from the outset that creating a partnership across all levels of the organization would be vital to building trust and ensuring collaboration. By aligning on five areas of optimization – Technology, Data & Reporting, Automation, Process Management, and Communications and Culture – we were able to approach the issue from a targeted perspective. We interviewed 50-plus employees across all areas of Finance, shadowed key reporting areas to document process flow, assessed technological issues, and identified 90-plus improvement opportunities with recommendations, process maps, and three distinct phases of implementation.

Solution

With the challenges fully understood, RevGen dug into the five areas of optimization, and shepherded the project through to completion with tried-and-true change enablement techniques.

Improved tools and optimizing technology

We introduced variety of enhancements to optimize current technology stack to help drive efficiency, collaboration, and accuracy. Also, we executed re-write of core manual journal entry process to move from batch to API technology, established an archiving strategy to promote stability and improve performance, and developed bots to replace manual business functions.

Holistic program management and change enablement

With 300+ employees across accounting, finance, and IT, we quickly realized program and change management would be key to implementing the new process. We defined milestones, as well as roles and responsibilities, leading to more automation, improved communication, and optimized enterprise resource planning.

Post-acquisition integration

Capturing the synergies from the merger was also a high priority. Having the two legacy companies work together as one, with defined assignments and workflow processes, produced dynamic teams that worked with more efficiency and accountability.

Results

Ultimately, these efforts led us to exceed our initial goal of meeting the pre-merger cycle times.

Reduced time to financial close reporting

Monthly financial reporting now took just 5-7 business days, down from the lengthy 19. This was possible because of the new processes with clearly defined roles, milestones, increased automation, and feedback loops.

Efficient task management framework

By defining, designing, and applying a task management framework, the client could now proactively manage over 200 milestones across 14 functions in accounting, finance, and IT.

Optimized data and reporting

Enhancing critical aspects that relied on extensive manual intervention, we enabled reduced revenue posting times, increased data accuracy, improved expense entry and reporting, yielded more comparable reporting, and freed up costly data storage space that improved system performance.