Financial Consolidation, Close, and Reporting: Challenges and Priorities

Craig Schiff , President and CEO, BPM Partners

Overview

Most performance management research studies have tended to focus primarily on budgeting and financial planning, usually targeting the FP&A team for responses. This is beginning to change though as several vendors with a primary focus on financial consolidation have commissioned their own research to better understand the challenges and needs of the Controller’s department.

Let’s take a look at highlights from two of these recent vendor surveys, as well as our own BPM Pulse, to better understand what the challenges and priorities are when it comes to Financial Consolidation, Close, and Reporting.

Talentia Consolidation and Financial/Management Reporting Survey Results

Here are a set of facts from the Talentia survey that clearly tell the story:

55.5% say that the team frequently works extra hours to deliver monthly, quarterly, and annual reports

70.1% say that the internal cost to meet financial and management reporting requirements has increased over the past 3 years

50.4% still use Excel for financial consolidation and reporting

 (Source: Talentia)

The economic volatility of the past few years has made it necessary to update data and reports more frequently, respond more quickly to ad hoc information requests, and generally operate with greater agility. This of course has required the already overburdened reporting team to put in more hours to get the job done, which in turn has increased the internal costs. The fact that half of the organizations are relying on Excel and a labor-intensive manual process does little to address this challenge and may in fact be the primary cause of the time demands on the team which in turn generates additional cost.

Fluence Survey on the State of Financial Consolidation, Close and Reporting Among Mid-Market Firms

In the same vein here are some data points from the Fluence survey:

55% said consolidating financial data is more time-consuming and difficult than it needs to be 

72% of those surveyed are still suffering through manual processes to some degree 

69% of those surveyed said the post-COVID hybrid work environment has caused them to re-evaluate their financial consolidation and reporting process

 (Source: Fluence)

Respondents to the Fluence survey expressed similar concerns to those raised in the Talentia survey. They also highlighted the fact that the evolving approach to the office/home work model was an opportunity to revisit the entire process. 

BPM Partners 2022 BPM Pulse Survey

From the vendor survey results it is clear that change is needed, and would be welcomed by the participants in this process.  The BPM Pulse survey can help us understand what that change might look like.

Question: Where Should Financial Consolidation Take Place?

(Source: 2022 BPM Pulse)

The data shows that the majority believe financial consolidation (and by extension close/disclosure management and financial reporting) should be included as part of a performance management system alongside financial and operational planning. This makes a lot of sense since having the processing of the actuals in the same system that is already home to the planning data will make actual vs. plan performance reporting more seamless and less error-prone.

Question: What is Important in a Financial Consolidation Solution (5= Most Important)?

(Source: 2022 BPM Pulse)

Those that still believe their ERP or ledger is the best pace for consolidation should look at the top results for this question where  respondents rated the importance of various aspects of a financial consolidation solution (on a 1 to 5 scale). The top 2 responses in particular are not traits you would usually associate with ERP systems. Elsewhere in the Pulse survey more than half of respondents said they have more than one ERP/GL system. Consolidating data from multiple source systems is a core feature of performance management consolidation systems and not something easily accomplished in any one  ERP system.

Conclusions

Financial consolidation and reporting is an important area that companies recognize needs to be improved upon, is taking longer and costing more than it should, and is probably leading to both reporting errors and employee burnout. There is a solution, and it is not a standalone spreadsheet nor an ERP system. We believe that a modern, cloud-based performance management system that unites budgeting, planning, and forecasting with financial consolidation and reporting is the best choice to address the challenges highlighted by these recent surveys.

Source Material:

Talentia – Controllers; Consolidation and Financial/Management Reporting Survey Results

Fluence – Survey on the State of Financial Consolidation, Close and Reporting Among Mid-Market Firms

BPM Partners – 2022 BPM Pulse Research Study

Further Reading:

BPM Partners Financial Consolidation and Reporting Buyers Guide

Buyers Guide: Budgeting and Planning Solutions

Executive Summary

NEWLY UPDATED 2022 – 2023 EDITION: FEATURING 24 VENDORS AND THE LATEST BPM PULSE RATINGS AND TRENDS DATA  

With more choices than ever in the Budgeting and Planning solution market we realized it was time to bring back our annual Buyers Guide. The requirements and use cases for Budgeting and Planning solutions have evolved, along with the capabilities of the vendor offerings. Most Buyers Guides available today are written by the vendors themselves, and as you might expect, are a little biased. BPM Partners is pleased to present its newly updated 2022 – 2023 Buyers Guide for Budgeting and Planning Solutions.

This is not an analyst report, but a consumer-oriented guide that leverages data from our annual BPM Pulse Research Study and Vendor Landscape Matrix report. It is the only vendor-neutral Buyers Guide for Budgeting and Planning Solutions available today.

Areas covered in this guide include: budgeting, forecasting, modeling, financial planning, operational planning, analytics

This guide has 6 key sections:

  • Requirements – we provide guidance on the key requirements you should be considering for your new budgeting and planning solution utilizing our latest BPM Pulse research
  • Core vendors – we provide a brief snapshot for a list of established vendors that have received top ratings specifically for their budgeting and planning functionality
  • Core vendors rating comparison chart – we provide a chart comparing customer satisfaction ratings for seven key attributes from the latest BPM Pulse customer satisfaction ratings
  • Additional vendors – we provide a list of newer vendors and others that did not meet our core vendor criteria
  • Process – we provide elements of the methodology and best practices we use on our own projects to enable you to find the best vendor for your unique requirements
  • Bonus content – case studies and product data sheets from OneStream Software, Prophix, Talentia, Unit4, and Wolters Kluwer CCH Tagetik

Get your copy …