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Times are changing for the financial consolidation process, and for finance teams in general. In FSN’s latest report, “Insight and Innovation in Consolidation Systems”, Gary Simon discusses the shift in finance from a department focused on financial stewardship and risk to one of strategic business development and support. In the wake of this, financial consolidation tools have evolved to not only make light work of the consolidation of financial data from across the business but also to uncover insights which help drive more efficient decision-making.
The FSN report highlights that despite declining headcount, finance teams face growing workload in relation to managing large volumes of data from different sources, including that which is non-financial. Trying to collate, compare, and analyze different types of data can be tricky, especially with continuously changing business requirements requiring new strategic insights. In fact, 79% of finance professionals who took part in FSN’s recent “Innovation in the Finance Function” research cited this as their main concern in relation to the analysis of data.
Traditional tools for consolidation and reporting may make light work of the consolidation of financial statements but their capabilities often stop there. If finance teams are to effectively derive insights from data that is originating all over the business, they need a solution which not only consolidates data from multiple financial sources but also enables insights to be gained from non-financial data too.
The next generation of financial consolidation software is doing exactly that. Rather than simply consolidating the finances from different business units and performing tasks such as eliminations and intercompany reconciliations (a necessary but only partially insightful process), it is taking organizations on the road to what FSN refers to as “data mastery”. By enabling the consolidation and visualization of both financial and non-financial business data, modern data consolidation solutions deliver greater insights for decision-making, entering into the realms of Business Intelligence (something FSN argues is key to gaining real insight from business data) and Corporate Performance Management.
Aside from consolidating financial statements with ease, there are numerous reasons why finance teams are turning to a consolidation solution which offers a more unified approach to data analysis:
By collecting both financial and non-financial data from various sources across the business in visual, interactive dashboards, users can discover insights which may previously have gone unnoticed and explore this data down to the lowest level of detail, helping to identify trends or correlations across business functions such as operations, sales, and marketing.
Reducing the time it takes to manually collate, examine, and understand relationships between financial and non-financial data enables the finance team to spend more time making strategic recommendations based on new insights gained.
Using the same dataset across multiple reports and processes creates assurance that there is a higher level of accuracy in all activities, meaning more accurate information sharing, more people on the same page, and more accurate decision-making.
A unified solution enables the use of both financial and non-financial data for planning, forecasting, and simulation in addition to the consolidation and reporting aspects, allowing for an even more-informed decision to be made thanks to the ability to test out scenarios and predict their outcomes.
Of course, this blog just scratches the surface of the capabilities and benefits which unified solutions offer, but hopefully gives you some insight into the approach being taken by organizations who are taking their consolidation to the next level. To find out more, read the full Insight and Innovation in Consolidation Systems report from FSN.
If you’re thinking of updating your approach, BOARD’s Financial Consolidation solution utilizes the technology within the BOARD Decision-Making Platform to offer a complete financial consolidation solution interlinked with all of the analysis, simulation, and planning functionality required to take a completely unified approach.
Download "Insight and Innovation in Consolidation Systems" to discover more on the shift from financial stewardship to strategic business support.