Companies that have multiple entities understand the process well: financial consolidation is a critical part of closing the books and keeping accounting streamlined throughout the organization. And while today’s tools are powerful, there’s still a significant amount of manual processes that create slowdowns and affect the timeliness of the close, increasing overall financial risk, all while tying up financial resources. In this article, we’ll explore how automation can help eliminate such manual bottlenecks and help accelerate the close – and how PARIS Tech can step in as a partner for finance teams looking to modernize.
What is Financial Consolidation, and What Causes Manual Close Delays?
Financial consolidation refers to the overall process of combining financial data into a single set of financials from a parent company. Data is typically pulled from various entities like subsidiaries, business units, or departments and comes together into a unified report. In order to combine all of the data into one information aggregate, finance teams will need to aggregate data, eliminate intercompany transactions, convert any necessary currencies, and ensure compliance across all accounting standards. Financial consolidation is a crucial step when it comes to producing accurate and timely reporting that then speaks to an organization’s financial health overall.
What are manual close delays?
Manual close delays occur as hurdles during the financial consolidation process. The delays are created by extended time necessary to complete the process, which come up as a result of it being handled through disconnected systems, unoptimized manual spreadsheets, and complicated workflows throughout an organization that aren’t sufficiently automated. There are a few causes for delays, usually coming down to:
- Data silos between information sources
- Reliance on spreadsheet uploads and downloads in addition to manual offline calculations
- Email-powered communications about reconciliation and other data collection
- Lack of real-time validation and insufficient workflow transparency
- Intercompany eliminations and currency conversions require time-consuming adjustments
When systems are disjointed, finance teams end up being bogged down by repetitive tasks that are also more prone to human error. These types of delays are what slow down the close cycle overall and increase the risk of errors and missed deadlines across the board.
The Business Cost of Manual Close Delays
Financial data drives critical business decisions, and its timeliness can be the deciding factor between choices for business executives. When operating through manual close processes, financial reporting can become delayed by weeks, creating a lag between things that happen and when the business actually responds to them. Additionally, executive teams run the risk of operating on outdated information, which not only risks incorrect capital allocation or misaligned resources but also can contribute to missed opportunities for gaining a competitive advantage.
Increased Audit Risk and Compliance Pressure
Outdated manual processes causing human error aren’t just inconvenient – they can actually put the company at greater risk of being audited or flagged for not following compliance protocols. Since spreadsheet-based consolidation often lacks proper version control or creates incomplete audit trails, auditors tend to scrutinize these manual processes more intensely and require additional documentation. Compliance requirements are also getting more and more stringent with each passing year, and regulatory penalties for late or inaccurate filings can stack up quickly.
This creates additional vulnerability: the more manual processes and recovery, the more finance teams have to focus on low-value tasks that slow the organization down overall. With manual processes, finance professionals will spend more time on data collection and validation than analysis, and late nights and weekends can add up to increased fatigue and employee burnout. The more complicated the reconciliations, the more additional stress that high-value finance talent has to undertake from being bogged down by repetitive tasks. This leads to more strategic and impactful projects being delayed at the expense of increased close-cycle demands.
How Automation Streamlines Multi-Entity Consolidation
When it comes to data entry and analysis in accounting, few processes stand to lose from implementing smarter automation systems. When secure and reliable data pipelines come together from disparate sources, businesses can benefit from additional validation that will guarantee their numbers stack up the first time. By eliminating the need for manual exports, imports, and copy-paste mistakes, companies can ensure consistency across entities in their financial consolidation processes. Things like automated validation rules can spot data inconsistencies before they make their way too far down the data pipeline and real-time visibility into financial performance preemptively fast-tracks the reporting from the get-go since leaders don’t have to wait for period-end.
Automated validation rules within Excel can include things like:
- Industry-specific consolidation templates and configurable rule sets
- Version control for maintaining historical consolidation parameters
- Hierarchy management to accommodate for organizational changes
Additionally, automation can also help with keeping the process running smoothly from a project management perspective, with helpful tools like:
- Close process transparency with clarity into task ownership and status tracking
- Notification automations to reduce or eliminate manual follow ups
- Configurable approval workflows to streamline communication and reduce bottlenecks
- Exception-based review to focus on anomalies instead of routine line items
- Comprehensive audit trails throughout the process
How PARIS Tech Helps Eliminate Manual Close Delays
At PARIS Tech, our solutions are always focused on transforming the financial close: we’ve built the tools to help streamline dated processes with thoughtful automation that’s tailored to financial professionals. Our platform was developed with CFOs, controllers, and finance teams tired of the same spreadsheet headaches and last-minute fire drills every quarter. The result is a consolidation and close solution that’s practical, powerful, and purpose-built to solve real-world finance challenges: without having to abandon the tried and true methods of Excel.
We help organizations cut their close times, eliminate manual errors, and – maybe most importantly – give finance teams their time back. That means fewer late nights for analysts fixing formula errors, and more time spent on high-impact work like forecasting, scenario planning, and supporting strategic decisions. With a comprehensive and customizable automation suite, businesses can better streamline multi-entity consolidation and accelerate the financial close process. PARIS Tech empowers finance leaders to navigate their financial consolidation processes with speed, confidence, and clarity, no matter how complex the organization.
