Key Use Cases of Financial Close Automation Software

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Key Use Cases of Financial Close Automation Software

CFO Tech Outlook | Tuesday, August 09, 2022

In automated software applications, uncleared transactions get matched between counter-parties, matched items are split, and matched items are alerted to nominated individuals.

FREMONT, CA: The financial close is adjusting and closing the financial records at the end of the fiscal year. Different obstacles may hinder the process, including, but not limited to, complex regulatory requirements, managing data across multiple systems, and the lengthy nature of the close checklist. Financial close software solutions are available that automate the checklist execution with minimal human intervention. Financial close automation software automates journal entry tasks, balance sheet certification, cash flow analysis, and intercompany tasks. It will allow accountants to focus on more important matters at hand.

Automatic integration of journals

As part of the period-end close, journal entries are an essential activity. A journal-related close task is said to make up all close tasks, mostly due to the meticulous verification required to ensure that entries are accurate during close. There is no doubt that this task gets increasingly complex and requires a lot more focus as each new source of data is added. An automated solution allows data to be automatically and accurately entered into a journal from various business management and ERP systems, which is one of the significant benefits of an automated solution.

Managing intercompany tasks

Multi-sector data or inter-company data can cause complexity within an enterprise. Different company financial systems, currency exchange differences, and timing delays, for example, can cause a mess and complicated back and forth close to the holiday season. Resolving all these issues is complex and time-consuming, threatening the timely closing of the books and delaying reconciliation. To accomplish intercompany calculations, all concerned persons must be fully aware of their respective balances, differences between them, and underlying transactions. Additionally, the software posts intercompany-related documents directly into the counter-party books.

Reducing balance sheet inefficiencies

Reconciliation of balance sheets, or balancing debits and credits, requires error-free data capture from multiple distributed systems, then manual input into spreadsheets. A single source can be achieved using automated solutions for managing data warehouses that check for anomalies or duplicates. By automating the process, all the data will be stored in one place, accessible to all concerned personnel, accurate, efficient, and seamlessly imported into the software. Additionally, automated balance sheet certification saves time by eliminating repetitive manual tasks, ensures data quality, and can potentially lower audit fees. 

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