Cloud-based solutions offer financial close and reporting capabilities within a single platform that can be integrated with other finance applications. This provides a comprehensive platform for financial closing and reporting of results. Organizations can also enable flexible working options with support for both on-site and remote financial close processes.
Advantages of Cloud-Based Financial Close Solutions
Finance teams need cloud-based financial close solutions for critical capabilities and to enable a more transparent and collaborative financial close. Some of these critical capabilities include:
1. Support for Emerging Technologies
While the demand for AI capabilities is relatively low right now, customer surveys suggest that there will be a huge increase in AI-enabled processes in the future. Cloud-based financial close solutions are offering AI capabilities which will be confined to specific use cases such as:
- Machine learning for account-reconciliation and transaction-matching functionalities
- Natural language processing with chatbots for financial reporting
- Machine learning to identify anomalies in the data being processed in financial consolidation solutions
2. Support for Traditional Financial Close Processes
Cloud solutions can support foundational financial close capabilities, including management and financial reporting, basic financial consolidation, disclosure reporting, and reconciliation and close process management. It also includes:
- More complex reporting structures
- Management reporting focusing on performance reporting
- More complex consolidations
- Basic reconciliation matching
- Better collaboration across ERP systems for financial close processing
- Better disclosure management
3. Support for Complex Financial Close Processes
Cloud solutions can also support more-complex financial close requirements such as reconciliation management, transaction matching, multiple unit, country or regulatory financial consolidations, inter-entity invoicing and eliminations.
4. Support for Analytics
Cloud-based financial close solutions support analytics that provide different views of financial results and items in reconciliation. Analytics can also be used to effectively determine the status of financial processes. This could include a reconciliation management solution that shows where bottlenecks are occurring, or a financial consolidation system that displays the status of general ledger feeds in real time.
5. Ease of Implementation
Cloud-based financial close solutions can be designed and implemented rapidly and with minimal specialized internal skills or external expertise. This capability is important for businesses of all sizes, but especially critical for smaller businesses or business units within larger organizations.
6. Ease of Maintenance/Upgrade
Cloud-based financial close solutions can be maintained and upgraded with a minimum of effort, specialized skills and cost. This is an important capability for businesses of all sizes to ensure compatibility with different products and to leverage new product features. It is especially critical for smaller companies with minimal IT resources and lower budgets to spend on third-party support for upgrades.
7. Ease of Use
Modern cloud solutions are easy to use from both an ongoing IT, administrative and end-user standpoint. The end-users should be able to easily run and maintain the system, reducing the reliance on IT for systems administration. Cloud solutions typically require minimal user training, with an interface that is suitable to casual users as well as to financial analysts, who use the system regularly.
Cloud-based financial close solutions can easily integrate into an organization’s financial as well as operational systems, reducing the reliance on IT and external resources to develop and maintain the interfaces. Integration for financial consolidation can be complex especially while processing multiple GL/ERP systems so this is a very useful benefit.
9. Performance and Agility
Cloud-based financial close solutions can scale quickly to support thousands of users for many customers, as well as to support agility through the frequent addition of new product capabilities. This is possible as most cloud solutions do not have the limitations often found in a data center for server support. They can support more-complex models and scenarios used for consolidation, as well as simpler ones for lower levels of the organization. They can also support multiple management hierarchies for management and financial consolidation, as well as support for multiple areas of disclosure.
10. Regulatory Support
Cloud-based financial close systems can support local regulatory, reporting and accounting practices for global organizations. Global organizations often require different regulatory support for specific countries, as well as larger EU accounting mandates such as IFRS. This also includes the ability to keep current for IFRS and FASB support.