SAP White PaperEnterprise Performance Management
THE FINANCIAL CLOSE
OPTIMIZING PERFORMANCE AND
DRIVING FINANCIAL EXCELLENCE
0077__2255335511__WWPP__FFaassttCClloossee__eenn..iinndddd 11 99//1122//22000088 1100::2211::0088 AAMM0077__2255335511__WWPP__FFaassttCClloossee__eenn..iinndddd 22 99//1122//22000088 1100::2211::0099 AAMMCONTENT
4 Executive Summary 12 The Role of Technology 12 Quick Wins and Long-Term 5 The Essential Ingredients of Performance OptimizationFinancial Excellence 12 Peer-to-Peer Intercompany Reconciliation 6 Drivers for a Fast, High-Quality 12 Integration with Source SystemsFinancial Close 12 Consolidation Applications 6 Internal and External Stakeholders 14 Ad Hoc Analysis and Reporting 6 The Dynamic Regulatory 14 Automated Internal Control Landscape Processes 7 The Benefits of a Fast Close 14 Close Process Monitoring and 7 Faster Access to Financial SchedulingInformation 7 More Time for Value-Added 15 Significant Gains Are Within Analysis Reach 7 Improved Control Systems and 15 A Four-Stage Action PlanQuality 7 Greater Time and Cost Savings 18 SAP Solutions for Enterprise During the Close Process Performance Management 8 Better Investor Relations 18 For More Information 9 How Fast Is Fast? 18 Acknowledgements
10 Barriers to a Fast, High-Quality Financial Close 10 Identifying and Understanding the Barriers 10 Data Quality and Collection Errors 10 Intercompany Reconciliation 10 Poor Performance from Reporting Applications 11 Lack of Automation 11 Weak Audit Trails
0077__2255335511__WWPP__FFaassttCClloossee__eenn..iinndddd 33 99//1122//22000088 1100::2211::0099 AAMMEXECUTIVE SUMMARY
THE IMPORTANCE OF CLOSING BOOKS
QUICKLY AND WITH QUALITY
The term "financial close" describes In this white paper, we discuss how a corporation's ability to complete its corporate finance centers can over-accounting cycles and produce financial come the barriers to a fast, high-quality statements for internal management close. By converging previously dispa-and external legal reporting. The rate disciplines of business intelligence; require ment to close books quickly governance, risk, and compliance; and and with quality is emerging again as enterprise performance management, an important project for today's global companies can get trusted data into the finance function. hands of key stakeholders in a timely manner. This paper identifies solutions In the late 1990s, companies became to help organizations improve and sus-more efficient at closing their books tain their close times and address the and reporting financial information, but challenges associated with automating compliance regulations such as the and testing internal controls.Sarbanes-Oxley Act placed additional reporting rules on organizations. The result is often a time-consuming, labor-intensive effort to ensure the quality of financial data. Companies are once again focused on improving reporting times and ensuring effective internal controls to govern the accuracy of these processes.
Why is it important for corporations to close their books quickly and with quali-ty? Closing fast enables quicker access to financial information, which gives management the foundation for timely and better-informed planning and deci-sion making. The fast close requires a quality close, where processes are monitored to ensure a foundation of trusted information for decision making. Closing fast also helps companies maintain a healthy image in the market, while companies that don't close fast can often suffer in the eyes of share-holders, investors, regulatory agencies, and trade exchanges.
4 SAP White Paper - The Financial Close
0077__2255335511__WWPP__FFaassttCClloossee__eenn..iinndddd 44 99//1122//22000088 1100::2211::0099 AAMMTHE ESSENTIAL INGREDIENTS
OF FINANCIAL EXCELLENCE
RESOURCES, PEOPLE, AND TECHNOLOGY
Financial excellence is achieved when Numerous global companies success- The drive for fast close, partly sparked resources, people, and technology are fully engaged in well-publicized at- by the e-business revolution and the combined to optimize and streamline tempts to improve not only the speed promise of the "click-of-the-mouse" processes, decrease operating costs, but also the accuracy and reliability of virtual clo... [download for more]
