Digital transformation in finance

The current process requires high detail and is time consuming, while the reconciliation process is also tedious. Moreover, with deadlines inevitably tight at the end of the month, the CFO will not be able to ensure that the process has been properly carried out.
This article addresses the challenges faced during the account closing process and how the organization is able to tackle such challenges and problems from a digital transformation perspective.
The main challenges during the account closing process can be categorized into four main areas. The first is timeliness. 
Organizations usually solve the issue of the account closing’s tight schedule by increasing the number of staff to handle it though this still does not ensure that the closing process will be completed on time. 
The second is the lack of visibility in the closing process. The CFO will not know what progress the team has made, whether the work will be finished prior to the deadline or not and what remains to be done. He or she will also not be able to fully control the quality and accuracy of l the reconciliation. 
Because of the tight timeline for the closing, the CFO will not know whether reconciliation has been completed or whether any adjustments have been raised. 
The combination of these three issues leads to a fourth challenge: lack of proper governance. 
Segregation of duties is one of the key controls during the closing process. The inability to track the responsible personnel at each step of the reconciliation process, e.g. preparer, reviewer, and approver, during a tight schedule can cause a high probability of ending up adjusting and resubmitting the report. 
This results in a negative effect on the CFO’s performance and credibility.
However, a clever organization can enhance its existing process by applying automation technology. 
Financial close automation software helps organizations govern and automate the financial accounting processes, reconciliations, controls, and monitoring.
It is a solution that provides the CFOs and the executives with visibility throughout the account closing process, which finally leads to better governance. Furthermore, transforming the organization’s financial processes to automation reduces manual works. 
With the application of financial close automation, CFOs will be able to tackle the challenges and improve the organization’s current account closing process. 
In terms of the timeliness and quality issue where CFOs and controllers are under a lot of pressure to shorten their closing period, the software will speed up management reporting and increase meaningful metrics, while having a little time left over to dedicate to the strategic projects. 
The financial close automation can improve the efficiency and quality and also eliminates the issue of managing team members to align with the workload. It also increases the report quality and decreases the number of adjustments due to reduced human error. The lack of visibility in the account closing process can be improved by monitoring through the financial close automation solution.
The CFO and the controller will be able to track the progress of the closing process, enabling them to support the team when needed 
Moreover, the visibility provided by the solution results in a better governance for the organizations. 
The solution could also provide the CFO with clearer visibility throughout the closing process and with the support from the solution, the CFO will be able to govern the team better than ever.
In conclusion, all finance departments face four main challenges from the account closing process, which are timeliness, visibility, quality and accuracy, and governance. The four challenges may result in high possibility of adjustments and resubmission of the report, causing an adverse impact on the CFO’s performance and credibility. 
The organization can enhance its existing process by applying automation technology. With the finance close automate solution, the organization can solve the issues by increasing governance and visibility from automating the financial closing process, reconciliation, control, and monitoring. That said, financial transformation is not about simply implementing the organization’s existing accounting system. Instead, the project plan must be carefully reviewed and the accounting process, workflow, and policy made more supportive for the technology. 
Technological solutions, combined with an effective accounting process, will build the optimal solution for the organization, enabling financial enterprises to accelerate the complex financial closing process, increase efficient usage of valuable resources and lead to controls and compliance.

Montri Khongkruephan is a Partner in Audit & Assurance of Deloitte Thailand