How two metrics can help CFOs solve their insight challenges

In the post-crisis hunger for analytics, CFOs will struggle with an old problem. According to Gartner, most CFOs want to drastically invest in data and analytics. However, also according to Gartner, only 20% of data spending produces any business value.

1. What causes this shortfall?

We can speculate a number of reasons. These stand chief among them: First, CFOs have too often treated insight and automation as two separate elements, rather than two sides of the same coin. Second, they have volunteered finance teams to deliver insight, but without removing roadblocks that prevent finance staff from acting as something other than a close and audit team.

2. Mistaking insight for automation (and automation for insight)

A wide range of surveys reports that CFOs demand data and analytics far more than automation. But financial chiefs should reconsider the nature of this ranking: Not by reversing insight and automation but by holding them together.

Automation gathers and consolidates real-time financial data, which executives then evaluate using automation-enabled business intelligence tools. The resulting insight delivers new opportunities for cost savings, opportunities leaders can exploit through automation.

In this sense, insight and automation act as two sides of the same coin. But why are monthly close and audit cycles so significant?

3. The basic metrics

Monthly close

Rarely can financial team members deliver their share of an organization’s analytic projects. In CFO magazine, a recent article samples the close times of over 2300 organizations. Top performers reported a closing time of 4.8 days; the median represented 6.4 days, and the bottom performers trailed at 10 days average closing time. Note that those bottom performers mark an apparently sound audit time according to the AICPA. In other words, the longer the practice takes, the more sound and thorough professional organizations take it to be.

But consider this. The finance team takes a twenty-day work week. Whether five or ten days of that finance professionals spend on closing—and re-closing, and arranging documents for closing—your finance team spends less to barely half of their time on everything else. So, when CFOs champion analytics, few financial experts exist to analyze and help forecast their data.

Audits

In ideal, an organization wants to facilitate the auditor’s own access, administration, and exploration of your financial system. Auditors should function without inconveniencing accounting staff. The organization should provide real-time remote access: an auditor’s login, full audit trails, and enterprise-accessible user and behavior tracking.

But despite these tools, many of the organizations we interact with have outdated or hybrid systems, often requiring each auditor to have one or more system guides. As audits spread beyond system records and involve more spreadsheets, the solution grows more involved and less transparent. Outside of marked change, the system will continue demanding as much and more help, undermining the finance energy available.

4. A different solution

In two of the most basic and troublesome metrics, executives can use automation and insight to complement each other. Insight can imagine a world with hitherto unforeseen close procedures, while automation can remove an enormous portion of the manual labor involved in closing.

Automation can deliver insight to audit users, who can then access automation-powered insight throughout the organization. With a solution like Xledger, organizations can see their monthly closes and audit times shrink by between fifty and seventy-five percent.

As these dynamics progress, the CFO now has a finance team with a real and magnifying portion of time: time to shift beyond close and audit teams; time to make major strategic priorities more than a to-do list, time to focus more on strategy and change agency. Of course, the CFO’s insight dilemmas extend further than this. But by shortening monthly closes and getting your team free of audits, CFOs can prepare their finance teams for the greatest probability of success.

Xledger partners with you to keep insight and automation in dialogue, delivering the market’s most advanced finance management solution to tens of thousands of customers worldwide. At Xledger, our market-leading automation cuts your manual labor by 75%; we have consistently reduced customer close times by days and slashed monthly audits to 50% of their former times. Xledger also delivers inquiry with the market’s most powerful BI toolset: empowering your decision-makers to drill-down, drill-through, and navigate to anywhere with lightning-fast flex screens.

Trusted by globally trusted audit firms PwC and BDO, Xledger has been recognized by both IDC and Gartner as a provider in the financial software market—IDC as a major player and Gartner as a representative vendor.