breakout - digital controllership - digital finance€¦ · digital financial controller head of...

Digital CFO

Digital Financial Controller

Head of Digital Financial Planning

& Analysis

Head of Digital Tax Head of Digital Finance Operations

Process Automation in Financial Closing and Reporting

2© 2019. For information, contact Deloitte China.

HUMAN ERROR IS STILL THE BIGGEST FACTOR AFFECTING TRUST IN FINANCE DATA

do not trust the accuracy of their financial data completely because of human error when data is input manually

41%

About this research The research was conducted by Censuswide, with 579 C-level and 575 finance professionals in seven markets (the UK, U.S., France, Germany, Australia, Hong Kong and Singapore), with minimum annual revenues as follows: • UK: 50m GBP • France: 50m EURO • Germany: 50m EURO • Singapore: 20m SGD • Hong Kong: 140m HKD • USA: 150m USD • Australia: 20m AUD The survey was conducted online between Aug. 15th and Sept. 12th, 2018.


ERRORS IN FINANCIAL DATA ARE ADDING WEEKS OF EXTRA WORK ACCORDING TO CFOs

THIS MEANS UP TO 114 DAYS PER YEAR WASTED TRYING TO FIX MISTAKES

say it takes 9-10 days per month for their organization to identify errors and make adjustments

would need to spend considerable time reworking the accounts and reissuing them if inaccuracies in financial data were not identified prior to reporting

42%36%

On top of 6+ days for month-end closing,and 20+ days for year-end closing

© 2019. For information, contact Deloitte China. 4

Manuel.

Manuel.

Automation

Automation

Automation Automation

Global close calendar

Real-time dashboards &

reports

Auto-Transaction Matching

Account reconciliation

Automated/Recurring Journals

• Embedded Approval

Workflow Mgmt.

• Controlled Document

Storage

• Automated email alerts

Record to Report

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End-to-end Solution for Financial Close

ERP

General Ledger

Sub-Ledger

Consolidation

Disclosure

Planning

Reporting

Digital Boardroom

Account reconciliation

Reconciliation approval

Documentation

Non-SAP sources

Manual account recs

Manual consolidation integrity

Spreadsheet based variances

Email / spreadsheet

documentation

Performed manually or using

homegrown tools by 76%+ of

organizations*

Cash Flow

Fixed Assets

Multi-currency

Connectors

POS/ ERP System Accounting SystemAutomation Tools

(e.g. )


Payment Gateways are Evolving

Accruals

AP / AR

GR / IR

Cash Pooling

Open Items Clearing

Intercompany Transactions

Bank Reconciliation

Point of Sales Reconciliation

Finance / out of Finance

Payroll, HR

Out of Finance

Etc…


HOW BLACKLINE WORKS?


Automation in Month-end Close Process

Exception

Handling

Functionality

Ability to handle

exceptions for

analysis

Matched Items

Unmatched Items

Automated

Journal Definition

Create Automated

Journal Entry

User Entered

Journal Entry

Allocations &

Look-up Tables

Journal Approval

Process

ERP

Data

Sourc

es

Transaction

Matching

Account

Reconciliations

Create

Supporting

Items

Data will be matched

automatically when they

uploaded to BlackLine

Balance sheet

accounts can be auto-

certified by

certification rules

Journal

Entry

Adjustment can be

generated by

predefined rules


TRANSACTION MATCHING


BlackLine Transaction Matching

© 2019. For information, contact Deloitte China. 1111© 2019. For information, contact Deloitte China.

(1 to 1)

(1 to 1) with date +/- 3 days

(1 to 1) with amount +/- 1 €

(1 to many)

(many to 1)

(1 to many) with date +/- 3 days

(many to many)

(1 to many) with manipulations

Rules

?

BlackLine Transaction Matching

© 2017. For information, contact Deloitte Touche Tohmatsu Limited. 12

Automated Rule-based Transaction Matching Process

To BlackLine

Matched Transactions

Reject

Matched by Administrator

Approve

Suggested MatchesMatching

Engine

Archive

Automated

Journal Posting

Reconciling Items

To GL

Manual Matches

User Selects Transactions to become Reconciling Items for GL

Account Reconciliation

Automated Journal Posting

Send Exceptions

To GL

To BlackLineProduct Period-End

Reconciliations

Unmatched Transactions

Match Sets with Pass Rules to match off transactions

Credit card

POS Store 1


Transaction Matching Use Cases

Accruals

AR/AP

Bank to GL

Benefits

(ADP/Payroll/Insurance

Provider Billing/401K)

Cash Application

Commissions

Credit Card (Merchant to

POS to GL)

CRM Operations

Escheatment (i.e Stale

Check)

Gifts & Grants

Gift/Reward Cards

High Volume Accounts

Intercompany

Internal Cash

Inventory

GR/IR

Sold Shipped Not Paid

Non-Financial

Payroll

POS

Purchasing

Subledger

(AR/AP/FA/Other)

T&E

Tax Withholding &

Remittance

Treasury Management

Unclaimed Property

Warranty Claims


ACCOUNT RECONCILIATIONS


General List Provides means to enter or import items that make up the ending balance

Sub-ledger Match Matches sub-ledger balance to the general ledger balance

Bank Account Template Matches bank accounts with or without matching – BAI, Swift files, etc.

Amortizable Prepaid Tracks items that are paid in one period and expensed in future periods

Accruable Template Tracks items expensed and accrued in the current period and paid in a future period

Schedule List Allows users to summarize multiple accrual schedules together, allows multiple analytical views

Calculated Balance Template Documents a detailed calculation that supports the general ledger balance

Suspense Template Reconciles accounts where amounts are temporarily recorded

Associated Accounts Compares one or more balances to a second set of one or more balances – e.g., Stat vs. GAAP comparison

Integrated Spreadsheets Enables the creation of a fully functional and highly customizable spreadsheet on the face of a reconciliation

Reconciliation Templates


RULE DESCRIPTION

All Balances Zero no Activity No activity in the period and reconciliation balance equals zero

Sub-ledger Match GL balance versus sub-ledger less than threshold

Bank Match GL balance versus bank balance less than threshold

Intercompany < Threshold Unidentified difference for intercompany reconciliation less than threshold

Zero Balance Account Zero Balance Account (ZBA) less than threshold

Imported Items Match GL balance versus imported items less than threshold

No Balance Change and no ActivityGL balance certified in a previous period, balance has not changed and

no ”activity in period”

Amortizable Prepaid < Threshold GL balance versus total of amortization schedules less than threshold

General Ledger Accounts in Management Review

Group Auto-certify

Permit auto-certification of Management Review Group when all of the

account in the group are auto-certified

Consolidation Accounts Match General LedgerGeneral Ledger Account Balance(s) equal consolidated balances from

reporting system

Journal Does Not Require User CertificationWhen imported from Excel journals that pass system validation can auto-

certify

Associated Account Balances Less than ThresholdAssociated Accounts will auto-certify when the unidentified difference is

less than threshold and when no other items exist

Auto-Certification Rules

* Auto-certification rules can be configured and turned on and off as needed


Average Percentage of Automation Achieved


Amortizable Prepaid Reconciliation Template


Certification Workflow


Communicative & Collaborative Close Process


Central Repository of Supporting

Supporting documents will be attached to the

face of the reconciliation. NO “Document

Hunting” anymore!!!


JOURNAL ENTRY


BlackLine – Point of Sales Reconciliation


Exception

Handling

Functionality

Ability to handle

exceptions for

analysis

Matched Items

Unmatched Items

Automated Journal

Definition

Create Automated

Journal Entry

User Entered

Journal Entry

Allocations &

Look-up Tables

Journal Approval

Process

ERP

Data

Sourc

es

Transaction

Matching

Journal

Entry

Account

Reconciliations

Create

Supporting

Items

Centralize Journals Management

Access information (e.g., comments,

supporting documents), underlying

matching transactions and

reconciling items

Automate and Streamline Journal

Entries

Automatically create, validate, and

post journals from multiple sources

Post Journals Everywhere

Connect to all financial systems and

ERPs and eliminate timing and

reconciling differences, fully auditable

trail


TASK MANAGEMENT


Start WD End WD Start Date End Date

Sub-Process Task 0 Sub-Task/Notes Task Owner Start End Start End Start End Start End Start On-Time%CompletedOn-Time%Issues

General AccountingPrepare and upload recurring accrual

journals

1. Audit fee

2. Tax provision

Coy CP

Tax filing fee, HR service fee,accounting

fee

RTR WD-5 WD-5 24-May 24-May WD-5 WD-5 WD-5 WD-5 WD-5 WD-5 WD-5 WD-5 100% 100%

General

AccountingPTP AP cutoff before noon WD-3 RTR WD-3 WD-3 28-May 28-May WD-3 WD-3 WD-3 WD-3 WD-3 WD-3 WD-3 WD-3 100% 100%

General Accounting 1. Vouchers not posted RTR WD-3 WD-2 28-May 30-May WD-3 WD-3 WD-3 WD-3 WD-3 WD-3 WD-3 WD-3 100% 100%

General Accounting 9. Prepaid Voucher RTR WD-3 WD-2 28-May 30-May N/A N/A 100% 100%

General Accounting 10. HR Recruitment cost RTR WD-3 WD-2 28-May 30-May WD-3 WD-3 100% 100%

General

AccountingT&E cutoff on EOB WD-4 RTR WD-4 WD-4 25-May 25-May WD-4 WD-4 WD-4 WD-4 WD-4 WD-4 WD-4 WD-4 100% 100%

General AccountingEnsure T&E accrual workbook updated

and uplaod /post accrual journalRTR WD-3 WD-2 28-May 30-May WD-3 WD-3 WD-3 WD-3 N/A N/A WD-3 WD-3 100% 100%

General AccountingEnsure AMEX accrual workbook

updated and uplaod /post accrual journalRTR WD-3 WD-2 28-May 30-May WD-3 WD-3 WD-3 WD-3 N/A N/A WD-3 WD-3 100% 100%

Fixed AssetsFA additions are completed by PTP

teamRTR WD-2 WD-1 30-May 31-May WD-1 WD-1 N/A N/A N/A N/A N/A N/A 50% 100%

Fixed Assets

FA reinstatement / accelerated

depreciation and disposal requests from

Country Team

RTR WD-2 WD-1 30-May 31-May WD-1 WD-1 N/A N/A WD-2 WD-2 WD-2 WD-2 50% 100%

Fixed Assets Run depreciationReconcile depreciation total with FAR

and TB ensure no varianceRTR WD-2 WD-1 30-May 31-May WD-1 WD-1 N/A N/A WD-2 WD-2 WD-2 WD-2 50% 100%

General Accounting

Prepare foreign exchange rates for

distribution to Corporate Finance

team/Related Coy

Email FOREX rates report to recipients RTR WD+1 WD+1 01-Jun 01-Jun WD+1 WD+1 100% 100%

General

AccountingOpen Period - GL RTR WD+1 WD+1 01-Jun 01-Jun WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 100% 100%

General

Accounting

Confirm that all journals are

uploaded to ERP by 10.30am

General Ledger>Journals>Journal

Entry> Create/Update Journal EntriesRTR WD+1 WD+1 01-Jun 01-Jun WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 100% 100%

General

Accounting

Confirm that all journals are

approved and posted in ERP by

11am

General Ledger>Journals>Journal

Entry> Create/Update Journal EntriesRTR WD+1 WD+1 01-Jun 01-Jun WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 WD+1 100% 100%

General

Accounting

P&L analysis. Send draft P&L to

Country for reviewCountry Fin WD+2 WD+3 04-Jun 05-Jun DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED 0% 0%

General Accounting Consol Roll Forward Preparation

Send Related Coy Roll Forward work

file to Related Coy team for ASC606

items with YTD balance

Country Fin WD+2 WD+2 04-Jun 04-Jun DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED 0% 0%

General

Accounting

P&L Flash (Final Cut) Submission

before 12pm

ONLY APPROVED BY COUNTRY

TEAMCountry Fin WD+3 WD+3 05-Jun 05-Jun DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED 0% 0%

General Accounting Country Fin WD+3 WD+3 05-Jun 05-Jun DELAYED DELAYED 0% 0%

General Accounting

To receive Related Coy Finance to

respond queries from Related Coy by

3pm

Country Fin WD+3 WD+4 05-Jun 06-Jun DELAYED DELAYED 0% 0%

General AccountingAssoc, UK revenue accrual will be

sent to R2R for their upload on WD3Country Fin WD+3 WD+3 05-Jun 05-Jun DELAYED DELAYED DELAYED 0% 0%

Fixed AssetsAsset Management (Fixed Asssets)

Reconciliation

Reconcile NBV total in FAR = TB and

ensure no varianceCountry Fin WD+4 WD+4 06-Jun 06-Jun DELAYED DELAYED DELAYED DELAYED 0% 0%

General Accounting

Prepare and upload journal for Cost

Center reclass for realised exchange

gain/loss

1. Download GL listing for GL 596700

2. Reclass Cost Centers to Finance

Cost Centers (411203/400101)

3. Upload and post journals

Country Fin WD+4 WD+4 06-Jun 06-Jun DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED 0% 0%

General Accounting Generation of trial balanceDownload TB

(CBGLQ043_LEDGER_DETAIL)Country Fin WD+5 WD+5 07-Jun 07-Jun DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED 0% 0%

General Accounting

Check to ensure US has posted

Global Allocation entry (except Invmt

Coy)

Country Fin WD+5 WD+5 07-Jun 07-Jun DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED 0% 0%

General Accounting Run interco revaluationEnsure all counterparties confirmed on

our balances before running revaluationCountry Fin WD+5 WD+5 07-Jun 07-Jun DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED 0% 0%

General Accounting Run Translation Country Fin WD+5 WD+5 07-Jun 07-Jun DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED DELAYED 0% 0%

Corporate Finance to provide ERP

P&L and raise queries (if any) to

Related Coy Finance

Ensure additions, reinstatement,

accelerated depreciation and disposal

of assets are posted

Accrue vendors invoices

Accrue T&E and AMEX expenses

Task OwnerTaskCompany A Company B Company C Company D

Completion WDStart

On-Time

%

Completed

On-Time

%

IssuesSub-ProcessMEC Timeline

Sub-Task/Notes

Is this the current way of

keeping track of the Month End Close

status?

Accountability on end-to-end close process


Role-focused Dashboard


Work Status Visibility


Trends Across Time


Accountability on End-to-end Close Process


Contact

Peter Koo

Partner, Digital and Information Technology, National Leader of IT Advisory ServicesDeloitte China

Tel: +852 2852 6507Email: [email protected]

Vincent Chiu

Associate Director, Digital and Information Technology, Deloitte China

Tel: +852 2238 7773Email: [email protected]

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Q&A