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Record to Report Transformation, Digitalization and RPA Strategy

Where do you see the main challenges and inefficiencies in the R2R process?

I find that the main challenges and inefficiencies in the R2R process can be split into three distinct sections: Operational Inefficiencies, Lack of Transparency and Financial Statement Risk.

Operational inefficiencies include all detailed and repetitive tasks, often completed in tedious workflows across disparate accounting systems. For example, reconciliations are often managed in multiple spreadsheets and via email. Paired with the typical lack of standardization, this means valuable time is wasted trying to determine the current status of the month-end close. Another example would be the time-intensive manual review of journal entries to ensure correct approvals. Other types of inefficiencies can include the level of effort to coordinate with technical resources: manual notification of readiness to know we can move forward in the process.  

In a similar vein, one of the main challenges facing F&A teams is a lack of transparency. Research studies in recent years have shown that CFOs and finance directors generally don’t have a considerable amount of confidence in the accuracy of the financial statements their teams are creating. The inefficient and non-standardized processes that impact various tasks at month end don’t provide the levels of transparency that would instill confidence in compliant and accurate financial statements.

And, when it’s all said and done, finance leaders are increasingly concerned about the unknown risks that may, and often are in some capacity, present in the financial statements they’re required to sign off on. While restatements are rare, they can have a devastating impact on the F&A team, the organization and its reputation. Consequently, financial professionals want to mitigate the risk of errors and catch them as early as possible to avoid restatements.

How would you recommend lowering costs within the R2R process?

In my opinion, the most effective method to reduce costs within the R2R process and ensure future scalability is with an integrated, risk-intelligent approach to automating the processes that supports consistent productivity, visibility and mitigates risk.

In finance, reducing costs is often equivalent to reducing time spent on manual and repetitive activities, so that employees can focus on more value-adding tasks. An integrated R2R Solution, such as Cadency, can provide this benefit through standardization and automation.

Risk intelligent automation technology can help reduce time and improve efficiencies, for example, in the account reconciliation process. Accounts with zero balances, ledger to sub ledger with no balance differences and accounts with no movements are prime candidates for automation. Applying such tools can help drastically reduce the time spent on account reconciliations. In fact, we have seen customers reduce the number of accounts to be reconciled by up to 90% and repurpose that time more efficiently adding value .

Another method of impacting time and thus cost is in the journal entry process. Financial professionals often must post information in several systems and deal with a time-consuming approval process. An integrated automation solution enables companies to have risk intelligent rules in place that route approvals to the correct person or auto-approve journal entries. Again, we have seen customers achieve time reductions of 75% when preparing and reviewing journal entries with an automated solution in place1.

Rather than relying on manual communication to work with IT related functions, the opportunity exists to automate communication that relays the completion of one step and use that automation to then execute the next steps.  We can remove the need to have resources tied to their desktops waiting to run jobs and instead track and monitor exceptions in the process.  This also allows those resources to work on improving the processing that occurs in these underlying systems.

One of the costliest aspects of the R2R process relates to misstatements and rework due to errors in reporting. By implementing R2R automation technology throughout the entire R2R process, executives have the visibility into and actionable ability to correct such errors before they compound into costly review and restatement projects. Our customers have found a 75% reduction in time for rework.

Furthermore, there are more areas in which automation technology can reduce time and effort spent, such as reconciliation reviewing, preparing and completing close tasks and control testing. Applying automation technology has been repeatedly proven as one of the most efficient ways to reduce costs in the R2R process.

What are some best practice examples to improve controls and reduce risks?

Generally speaking, a best practice would be to establish a system of controls distinct from your system of records (ERPs, etc.). The different checklist-style spreadsheets floating around in companies and the many emails sent between different people in the process don’t provide the level of transparency and control needed during the R2R process. A system of controls will provide a cohesive view on all activities in the R2R process and access risks over the different processes. Therefore, it needs to be integrated with existing technology and should have a form of risk intelligent automation, to enable appropriate controls and prioritization.

As organizations look to reduce the cost of their finance and accounting teams, it is essential to find the balance between reducing workloads while still maintaining control of the R2R process. For this reason, firms are increasingly looking to implement global, risk-based policies.

For example, by taking a risk-based approach to reconciliations, critical resources can be focused on the higher-risk activities while those tasks with lower risk are completed less frequently. With a global approach, the process can be standardized, rationalized and the appropriate actions can be taken dependent on the risk level.

Looking at balance sheet integrity, we find one of the best approaches for developing a standardized, global, risk-based reconciliation policy to be devised into four steps: First, define your reconciliations. Second, define risk-based policies. Third, establish the definition of high- and low-risk reconciliations and, fourth, utilize reconciliation automation software to automate the low-risk activities.

Another best practice is to leverage R2R technology to architect the full process – document all of the activities that have been determined to be part of the close.  Whether it is documented or not, our teams will do them if they believe they are necessary.  Once you have the full view, work to rationalize the list and determine the value brought to the financial close while eliminating the unnecessary work.  To further transform, use accelerators to automate as much as possible further allowing teams to focus on risk-impacting quality or activities.

The future of R2R automation will leverage Artificial Intelligence (AI) more and more to determine risk and drive better outcomes scientifically. For example, as a journal entry is created, AI will assess the risk in real time based on algorithms and enable humans to see this information as they process the journal entry. RI RPA will further leverage that information to automate the process, and the technology will utilize machine learning to improve over time.

At the end of the day, we’re all just accountants working to produce repeatable, error-free financial statements along with providing value to our organization’s future. Leveraging advanced technology allows us to create those reports and still leave time to deep dive into value-added tasks in and around the R2R process. When those same technology tools can reduce the risk inherent to our duties, everyone becomes more efficient and productive.

What would you like to achieve by attending the 4th Edition Record to Report Transformation, Digitalization and RPA Strategy Conference?

At events like this conference, I generally have two goals. To start, in our industry it is highly important to be close to the market and understand emerging needs and opportunities for financial professionals to provide additional value to their organizations. We are here to see what challenges finance professionals are facing every day. With that knowledge, we can make sure our solutions are aligned with market needs to deliver lasting value.

Also, we want to share our depth of knowledge related to the latest technology trends and best practices, ensuring everyone knows their options for solving even the most complex issues. Events should be a collaborative give-and-take where we all benefit from sharing ideas and experiences that can combat those ever-evolving challenges within the enterprise finance world.

An interview with:

Syril Mathai
Global Vice President of Alliances and Channel Partners at Trintech

This marcus evans event is about using automation, RPA, AL and best practices to make the R2R process less costly and more efficient.
Maturing technology with RPA, AL, ML, Automation and nice visualization tools enables SSC leads, F&A Leaders, and R2R Process Owners to transform the way finance function is managed, a re-invent a lot of processes, and roles with new robotic or automated processes, thus cutting costs and reducing headcount, as improving a quality and decision-making.

To view the Conference Agenda, click HERE! 

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About the conference

The implementation of RPA

We would be delighted to provide you with more information on the conference agenda.  Please fill in your details below and we will be in touch.

Syril Mathai is the Global Vice President of Alliances and Channel Partners at Trintech, and has over 20 years of experience working with the Accounting and Finance functions of companies world-wide. In his role, he is responsible for establishing sales relationships primarily within Big4 firms and BPO organizations to generate an indirect sales channel for Trintech.
Mathai joined Trintech in 2009 as a Senior Consultant, and has since held several strategic leadership roles during his tenure including Vice President of Global Services and Partner Enablement, Vice President of Strategic Execution Team and Area Sales Director. As a business leader with extensive operational experience enabling cross-functional relationships and process improvements for productivity within the Office of Finance, he has had a successful career experience in various roles achieved through consultative nature.
Mathai received his BBA in Accounting from the University of Texas at Arlington and is a Certified Public Accountant.

To view the Conference Agenda, click HERE! 

For all enquiries regarding speaking, sponsoring and attending this conference contact:

Yiota Andreou
Telephone: +357 22849 404
Fax: +357 22 849 394

4th Edition

13-15 May 2019 

Mövenpick Hotel Amsterdam City Centre, Netherlands