www.trintech.com www.trintech.com Transforming Transforming the the LAST MILE LAST MILE of of FINANCE FINANCE Reconciliations Best Practice Measurable Benefits 22 February 2012 Trintech | The Hackett Group | Intel Reconciliations Best Practice Measurable Benefits 22 February 2012 Trintech | The Hackett Group | Intel
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Measurable differences in utilizing best practices for reconciliations
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www.trintech.comwww.trintech.com
TransformingTransformingthethe LAST MILELAST MILE ofof
FINANCEFINANCEReconciliationsBest Practice Measurable Benefits
22 February 2012Trintech | The Hackett Group | Intel
ReconciliationsBest Practice Measurable Benefits
22 February 2012Trintech | The Hackett Group | Intel
AGENDAAGENDAIntroductionsThe Hackett GroupGilles Bonelli – Director EPM & A2R Practice Leader – EMEAReconciliations Best Practice and Automation
TrintechDavid Taylor – Executive VPWhat could best practice look like?
IntelVicky EspiasseGlobal Accounting Close and Reporting ControllerInspired innovation improves processes
Gilles Bonelli – Director EPM & A2R Practice Leader – EMEATeus Verbree – Director EPM Transformation - EMEA
Statement of Confidentiality and Usage Restrictions
This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein, in whole or in part, for any purpose is strictly prohibited without the prior written consent of The Hackett Group.
1. Reduce the demand & complexity drivers of reconciliations
2. Establish clear ownership and accountability for each account reconciliation
3. Effective management of account reconciliation process
4. Peer interactions drive continuous improvements5. Workflow for reconciliation process management6. Balance and Transaction Matching7. Data capture validation and control8. Status Monitoring and Alerting9. Maintain Business Rules throughout
Reconciliation Operations10. Automatically Assign, Organize, and Prioritize
Investment Drivers for Automating ReconciliationsLocal Close I Group Close I Reconcile I Report
David TaylorExecutive Vice President
Investment Drivers for Automating ReconciliationsLocal Close I Group Close I Reconcile I Report
David TaylorExecutive Vice President
Customers benefiting from last mile solutionsCustomers benefiting from last mile solutions
Commercial Financial
Delivering world-class results to customers for 20 years
Over 600 industry leaders - 26 of Fortune 50, 100+ of Fortune 500
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Typical Corporate expectations of financeTypical Corporate expectations of finance
No Material Weaknesses or significant deficiencies at ANY Period End
Rapid response to remediate deficiencies
Sustainable Processes
Control Improvements = Process Improvements = ROI
Best of Breed Cost effective Programs: practice what you preach
Last mile of finance is the riskiest of all F&A Processes, the least automated, and the most likely single point of failure in meeting Corporate expectations
Last Mile of Finance Themes/ Investment DriversLast Mile of Finance Themes/ Investment Drivers
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Drivers: Standardized,
consistent processes across entities
Productivity efficiencies gained through automation and effective collaboration
Single version of the truth through a single production platform encapsulating all sub-processes
Last Mile of Finance
Technologies
Drivers: Cost reductions leading to impressive Return on
Investment (ROI) Enhanced staff efficiencies allow for shifting focus
from transactional to analytical Enabling Specialization and production-based
performance through task consolidation within Centres of Excellence and Shared Services
Drivers: Inherent systematic
controls Quality improvement
due to reduced manual processes
Risk mitigation
Drivers: Unprecedented visibility into
key close activities across multiple management levels
Proactive monitoring capability to assist with identification of bottlenecks and control gaps
Last Mile of Finance Process Enabling Technologies focus on optimizing key financial processes.
Deployment of these tools focus primarily on transformation amongst four overarching themes:
• Transparency
• Process Unification
• Governance & Control
• Resource Optimization
Each theme is aligned to specific drivers that help guide successful implementation of sustainable and repeatable processes.
• Efficient Central/ Decentralized Administration• Auto-identification of new accounts (100% coverage)• Local Autonomy with central visibility and control – empowering your business units
Account Assignment
• Complete Account description with supporting controls, policies and rules• Account and Reconciliation history, including attachments and supporting evidence repository• Documented approval and change management workflow
Procedural Documentation Exists
• Live Role based Dashboard• Account Grouping, Interactive Matching, high volume trx matching and search and filtering criteria• Bulk- reconciliations - zero balance, no activity and threshold, Dynamic Risk Rating
Timely Reconciliations and substantiation
• Highlighted past dues and auto-notifications to User and Management!• Commentary and notes for audit trail• High Risk Accounts flagged for continuous monitoring
Issue Isolation
• Escalation workflow and collaboration capabilities• Intelligent based reporting capturing ALL the facts• Item aging and carry-forward rules, Lock-down on completed work
Issue Escalation and documented resolution
• Adjustment workflow, creation, review and approval• Reconciliation re-perform when balances change• Controlled closure of open items
Adjust with Integrity
• Standardized reconciliation templates with Built-in account certification and confirmation• Easily accessible reference information for best practice reconciliations• Continuous and inclusive audit trail
Personnel Enablement
Resource Optimization in ReconciliationsResource Optimization in Reconciliations
WorkLoad
100%
February March
80%
1Cost
Reduction
1 ‐ Eliminate manual worka) Right first time – reduction of corrections
performed during peak loadb) Automation ‐ cost reduction if the targeted
activity is performed during the peak load
2 – Evenly distribute the work loadMoving activities away from the peak load enables cost reduction and reallocate time for quality
2 2
Address bottlenecks to Improve Quality and Increase Efficiency
Sprint
Run
Crawl
Walk
Last Mile of Finance Maturity ModelLast Mile of Finance Maturity Model
Manual Process Improvements
• (Manual) detective controls & procedures
• Manual process improvements
• Legacy apps• Heavy spreadsheet use
• Email, Word, shared drives
Semi‐Automated Process
• Semi‐automated controls
• Point solutions for collaboration (e.g. SharePoint), process management and compliance
• Lack of controls across data streams
• No single view into close and reporting process
Manual Processes
• Disjointed processes• Legacy apps• Heavy spreadsheet use
• Email, Word, shared drives
Fully‐Automated& Optimized
• Best practices• (Automated) preventive controls embedded into business process
• Consolidated view into close & reporting process
• Fully integrated with XBRL, close, exception mgt, reconciliations, and compliance