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CFO Study: What a Difference a Day Makes


2/19/14

(ROSELAND, NJ) – Even just a single day or two makes all the difference to CFOs struggling with their company’s quarterly or monthly financial close process.

That is a central finding in a new poll of corporate CFOs, controllers and financial managers conducted by CohnReznick LLP, the 11th largest accounting, tax, and advisory firm in the United States.

“No matter how advanced they were in the financial close process, respondents said that picking up an additional day or two is very important because it creates high-value analytical time that can be used to provide meaningful insight to the rest of the management team,” said John Macrae, Principal, CohnReznick.

According to more than 70 percent of the survey respondents, five factors stood between their wish for a shorter financial close:

  1. Waiting for information from other people
  2. Lacking visibility into where things stand in the close process
  3. Coping with delays and errors caused by too many manual processes
  4. Facing the need to combine and analyze information from multiple enterprise resource planning (ERP) and other systems
  5. Fixing operational errors caused by poor processes and controls
     

Contributing to these factors is an overreliance on manual processes, which creates bottlenecks, clouds visibility into processes and can lead to errors – all left to financial managers to clean up at the end of an already stressful financial-close period.

“Many organizations are struggling with manual processes because they have under invested in technology or don’t know about systems that can help streamline the close process,” said Thomas Crawford, Manager, CohnReznick. “At the same time, CFOs are often tasked with consolidating results from seven or ten different systems, which causes further delays.”

CohnReznick also asked financial managers how long the financial close at their companies typically takes. The majority (40 per cent) said their companies were completing their financial close within 5-10 days, followed by 22 percent within 1-5 days and 16 percent within 15-20 days. All felt they could do better, with 40 percent saying they had a goal of reducing the closing cycle by 2-3 business days, 23 percent by 1 day, 21 percent by 4-5 business days, and 13 percent by more than 5 business days.

Gaining extra time to more carefully analyze results is one of the chief benefits of shortening the close process. “Companies that can shorten the process gain a competitive advantage,” said Macrae. “They are in a better position to react proactively to threats and opportunities and are perceived as well run by their stakeholders. And, because there’s more time to double check data, their decision makers have more confidence in the quality of their reports,” he said.

"The bottom line," added Macrae, “is that financial managers want and need to improve their financial close processes. And the good thing is, there are good business process improvement strategies and technologies out there that definitely can help them achieve their goals.”


About CohnReznick’s Management and Technology Consulting Practice
The consultants of CohnReznick’s Management and Technology Consulting practice are dedicated to helping organizations protect and improve the profitability, cash flow, and value of their organizations. This is accomplished by improving the effectiveness and efficiency of business processes, optimizing access to information to improve decision making, maximizing return on investment (ROI) from technology investments, and mitigating risk through improved financial and operational controls.

About CohnReznick
With origins dating back to 1919, CohnReznick is currently the 11th largest accounting, tax and advisory firm in the United States, combining the resources and technical expertise of a national firm with the hands-on, entrepreneurial approach that today's dynamic business environment demands. CohnReznick serves a large number of industries and offers specialized services for Fortune 1000 companies, middle-market firms, international enterprises, government agencies, not-for-profit organizations, and other key market sectors.

Headquartered in New York, NY, CohnReznick serves its clients with 25 offices, more than 280 partners, and 2,000 employees. The firm is a member of Nexia International, a global network of independent accountancy, tax, and business advisors. For more information, visit www.cohnreznick.com.

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