Many growing organisations find themselves confronted by the bewildering reporting complexity of multiple entities, divisions, business units and cost centres in locations locally and across the world. This expansion very often far outstrips the collating and reporting capabilities of the legacy spreadsheet and standalone accounting applications currently in use.
In addition, finance departments in most organisations are coming under increasing pressure to transform and streamline the reporting process, while meeting compliance requirements. And so begins the search for a financial consolidation solution, only to be faced by the growing realisation that financial consolidation can be complicated, expensive and time consuming to the organisation.
Here the question soon arises as to whether it is in fact possible to find a consolidation solution that cuts through all of these pain-points or whether will it be necessary to compromise in some area. Below are some financial consolidation solution must-haves that organisations should be looking out for.
- Functionality combined with simplicity allows effective collation, consolidation and communication: Ideally the consolidation solution should be able to provide all the required financial functionality in a simplified way. Streamlining and simplifying this functionality allows the financial manager to apply the technical expertise and skill that they have been trained and employed to do, without the hassle of having to deal with ineffective, complex and time-consuming collating and reporting processes.
- Bigger is not necessarily better, local is preferred: Although large international software solution brands have their benefits, they are not always the best solution for growing organisations. Opting for an international solution provider not only requires dealing with foreign currencies and time zones, but more importantly does not always provide the development and support turnaround that many smaller local solutions have to offer. Being required to join an international queuing system for development and support requirements, puts an organisation at a distinct reporting disadvantage.
- Be aware of time, scope and project costs: To maximise efficiency and successfully control project scope and cost, organisations should ideally manage their own financial consolidation as opposed to leaving it primarily in the hands of the solution provider. Organisations should therefore insist on defining fixed scope, time and the cost of their agreements with solution providers, and thoroughly investigate their track record before committing.
- Fancy bells and whistles often come at a price: While the addition of all sorts of fancy bells and whistles to the final product and service may appear desirable, these often come with a hefty price tag. Helpful here is weighing up whether these bells and whistles are a nice to have or whether they offering real core reporting advantages to the organisation. One needs to bear in mind that often the more expensive solutions are often just that – more expensive, and not necessarily superior.
- Self-maintainability saves time and money: Significant time, energy and cost savings can be realised by opting for a solution that is completely self-maintainable. This allows organisations the choice to avoid contracting in consultants every time there is a change or scale-up in complexity, size or reporting application.
- A one-size-fits-all solution is possible: No matter how big or complex the organisation, the consolidation solution should be flexible enough to be scaled according to the organisation’s requirements. This greatly simplifies processes where simplicity often unlocks time and cost savings.
- The often hidden cost of training and change management: Here, research is required to determine which solution has the highest adoption rate and how much training will be required during and after implementation. In this scenario, time once again equates to money.
- Look out for IT infrastructure that may require additional resources: Some consolidation software solutions require a large amount of resources to ensure the IT infrastructure remains compatible with the consolidation solution. It is this additional labour and resources required from the IT department, which can dramatically drive up internal costs of reporting.
In conclusion, while there is much to be considered before selecting a consolidation solution, it is ultimately the right combination of human skill, experience and technology that will assure success for the financial director and his reporting team. ❐
author: rhys robinson