Radically Reducing Close Time with Data Reconciliation
A multi-billion dollar consumer products manufacturing company implemented the Cost Accounting module within their ERP system in order to facilitate better costing methodologies and variance capture in their financial statements. The system was built on top of a unique home grown manufacturing system ultimately resulting in a highly customized, complex technical environment that was not easily map-able into a modern ERP. Upon go-live, the Cost Accounting team quickly discovered that their month end close was taking longer than it had previously and needed to be expedited.
Process Controls and Implementation
Financial Statement Close Process
Actionable Business Analytics
Accounting Policies & Procedures
Close Process Acceleration – Our Accordion team worked closely with the Company’s Cost Accounting professionals to develop end to end processes around the new system’s capabilities. We leveraged native system functionality and industry best practices to reduce risk of error in manual reconciliations and journal entry execution. Additionally, we conducted detailed walk throughs of key processes, highlighting potential control weaknesses, and recommending best practices. Highlights to the improved close timeline included:
- Development of a detailed close calendar and checklist
- Realignment of close responsibilities among the Cost Accounting team to better align to their skill sets and experiences
- Automating processes by leveraging system functionality, resulting in less potential for human error
- Identification of processes that could be performed in advance of close day 1 (e.g. specific financial analyses)
Data Reconciliation – We worked with individuals across the finance and technology teams to reconcile transaction level information from the base tables on the Company’s manufacturing system to the data being transferred to the new Cost Accounting module via interface files to legacy accounting inventory reports. Ultimately, we were able to develop detailed build ups of the differences in methodology behind each approach, highlight discrepancies, and recommendations for improved data integrity.
With our assistance, the Cost Accounting team was able to cut their days to close in half (to seven days). Executing on recommendations from our team, the Company’s Cost Accounting team further reduced the close down to five business days.