Have you “hit the wall” in using spreadsheets for financial consolidation and reporting? Are you ready to make the move to a cloud-based EPM solution that can help you spend more time on value-added analysis and less time on drudgery?
Do you know how to make the business case to your company for investing in a cloud-based EPM solution? This article provides some guidance and tips on where to look for the savings and benefits your company can achieve by kicking the spreadsheet habit and moving to the cloud.
Reducing Reliance on Spreadsheets for Financial Reporting
Despite all of the noise in the market about the challenges of using spreadsheets for corporate financial processes, many organizations continue to use spreadsheets for reporting. In fact, in the 2015 BPM Pulse survey by BPM Partners, 22% of respondents indicated they were using spreadsheets as the primary solution for financial reporting. In the same survey, 12% indicated they were using spreadsheets as the primary solution for financial consolidation.
In a prior blog article, we highlighted the key challenges in using spreadsheets for financial consolidation and reporting:
- Too much time spent on data collection
- Challenges in consolidating multiple spreadsheets and correcting errors
- Limited reporting and analysis capabilities, and too much manual effort
- Not being compliant with US GAAP or IFRS
- Lack of controls and audit trails
- Lack of security
- Time-consuming and costly audit process
All of these issues only get magnified as an organization expands and grows in complexity. The next logical step is to replace a spreadsheet-based financial consolidation and reporting process with a purpose-built enterprise performance management (EPM) application designed to streamline these processes.
Managing Financial Consolidation and Reporting in the Cloud
Historically, most organizations have deployed financial consolidation and reporting applications on-premises. But many are now finding that this approach can be time-consuming and costly, especially for small and mid-sized organizations. This is fueling increasing interest and demand for cloud-based financial consolidation and reporting applications.
The good news here is that cloud-based solutions have been available for a number of years, and many now offer the same capabilities as on-premises solutions. They also provide a number of advantages over on-premises solutions:
- Speed of deployment
- Reduced reliance on IT
- Faster innovation
- No hardware or software to set up or maintain and upgrade over time
- Reduced up-front costs and lower ongoing cost of ownership
- Better security
These benefits are well-documented in a number of our published blog articles, white papers, customer videos, and case studies. But to acquire and implement a cloud-based financial consolidation and reporting system, you’ll still need to get budget approval for the annual subscription, as well as the implementation and training costs.
So how do you make the business case for investing in cloud-based EPM applications to your senior management? Based on the work we’ve done with many other customers, here are some suggested areas to focus on and ranges of potential savings.
Making the Business Case for Cloud-Based Reporting
Reduce manual data collection and consolidation – With automated data collection and cloud-based consolidation of data, you can reduce the time and effort here by up to 75% per month/quarter.
Streamline adjustments and intercompany reconciliations – A purpose-built financial consolidation application makes the journal entry adjustment process much easier and can automate much of the intercompany reconciliation process. This can save a number of days in the financial close process, reducing it by 50-80% per month/quarter.
Automated and timelier reporting – A purpose-built application with integrated reporting tools will make the creation and distribution of financial statements much easier and faster. Again, here you can expect time-savings of 50% or more each month/quarter.
Improved audit trails, reduced audit costs – Another advantage of purpose-built financial consolidation and reporting applications is the built-in audit trails they provide. This feature makes it much easier for both internal and external auditors to trace every line item of the balance sheet or income statement back to its origins. This can lead to substantial savings in both internal and external audit costs.
Finance time shifts to value-added analysis – One of the key benefits of all of the time savings covered above is that the Finance staff can close the books and deliver the results much faster to internal and external stakeholders. This often means that the days or weeks shaved off the financial close process allow Finance to spend more time on value-added analysis of the business and providing decision support to line of business managers. This benefit is tough to quantify, but it can reduce the need to hire financial or operations analysts across the business.
Platform to support future needs – Finally, a key benefit of implementing a cloud-based solution for financial consolidation and reporting is that it provides a platform that can support other needs or future requirements. Most cloud-based applications are part of an integrated suite that also supports financial and operational budgeting, planning, forecasting, modeling, and analysis of the business. The solution can benefit not only the Controller’s office, but also the guys in FP&A who are also struggling with spreadsheets. So there’s plenty of upside benefit here as well by replacing other spreadsheet processes with the same platform.
Host Analytics has worked with over 500 companies to help them improve budgeting, planning, financial and management reporting, and analytic processes. These companies replaced either spreadsheets or legacy on-premises applications with our cloud-based EPM suite. Here are some examples of the types of improvements and benefits customers achieved with our solution in the financial reporting area.
- iCIMS reduced board reporting from 4 days to 4 hours
- Axioma reduced its close process from 16 days to 4 days and time spent correcting spreadsheets from 20 hours monthly to zero.
- Physio Control reduced the monthly close by 2 weeks
- Groupon reduced the monthly consolidation from 3 days to 1 hour
To learn more about the benefits your organization can achieve by replacing spreadsheets with Host Analytics Cloud EPM Suite, check out our customer videos and case studies. Also, here’s a free white paper that should help you develop the business case as well. Best of luck!