Optimizing the Last Mile of Finance

www.trintech.com

Optimizing

the LAST MILE of

FINANCE

“Optimizing The Last Mile Of Finance” Margaret Kelly, CPA

Financial Solutions, Trintech

Gavin Backos

KPMG Advisory Services

Angela Stephens

SVP, Controller-Dr Pepper Snapple Group

Agenda

• Introductions

• Last Mile of Finance Transformation – Gavin Backos, KPMG

• Roadmap for Continuous Improvement-Margaret Kelly, Trintech

• Case Study from Dr. Pepper Snapple Group: challenges and solution for account reconciliation process-Angela Stephens

Last Mile of

Finance

Gavin Backos

March 9, 2012

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL 4 KPMG – Last Mile of Finance

Finance Transformation

How different Firms define Finance Transformation

Finance Transformation is defined slightly different, but ultimately it is all about efficiency, effectiveness and change

4

In today’s market, finance functions are

under increasing pressure to improve

performance. Source: Ernst & Young Web Site



Technology enablers for the Last Mile of Finance (Record to Report- R2R

Process)

Technologies enable various layers of effective control and execution throughout the R2R process.

Close and Reporting Cycle

Time to Close Time to

Consolidate Time to Report

Procure to Pay

Order to Cash

Fixed Assets

Payroll

General Ledger

Close

Non-Financial

Information

Consolidation

Process

Internal

Reporting

External

Reporting

Regulatory

Reporting

Governance

Organization and People (Roles and Responsibilities)

Policies and Procedures

Information Systems and Technology

Account Reconciliations

Close Cycle &

Task Management

Transaction Matching &

Operational Reconciliations

Variance Analysis

Consolidation Management

Journal Entry Management

External Financial

Reporting & XBRL

Compliance & ERM



Define the Last Mile of Finance

Understand what creates value and how to mitigate Risk

1. Transaction processing

Eliminate delays through auto

scheduling and removal of manual

interfaces

Tighten up cut off procedures

Address data integrity with more

effective validation processes

Interface validation and monitoring

Create an Operational Close

process

Robust SLAs with IT

1

2. General ledger close

Enthusiastic & Qualified people

Rigor & discipline – comprehensive

close calendar & checklist tied to

documented process, policy, &

controls

Only necessary manual JE’s

Implement automatic and detective

controls

Automate & standardize

reconciliations

2

3. Consolidation process

Use technology to accommodate

complex legal structures

Automate data integration

Standardize all chart of accounts

Set a robust and disciplined Inter-

company process & policy

Eliminate non-standard

consolidation adjustments

Integrate disclosure data

requirements with the COA or data

collection process

3

4. Reporting and analysis

Clearly defined reporting strategy

tied to overall company strategy

Leverage ERP, Business

Intelligence tools, & ODS/DW

Spreadsheets used for presentation

and delivery ONLY

Tighten up all data sources and

store in an ODS/DW

Actuals, Budget, & Forecast data

centrally stored and harmonized

4

Improve the close and reporting cycle while reducing Financial Statement Risk

Stakeholders

Company

Strategy

Reporting

Strategy &

Requirements

Performance

Management

Users

Local/Group GAAP

Reporting Plans,

Budgets, and

Forecasts

Management

Information

Other External Reporting

Transaction

Processing

General Ledger

Close

Non-financial

Information

Time to Close Time to

Consolidate Time to Report

Governance

Organization and People (e.g., structure, roles, and responsibilities)

Process (e.g., policies, procedures, controls, operations & chart of accounts)

Information Systems/Technology

1

2 Consolidation

Process

3

Internal Reporting

External Reporting

Regulatory Reporting

4

Close Operations and Reporting Cycles



Creating value

The cost and value of finance

Business Financial Support

Business & Financial Analysis

Transaction Processing/Controls &

Compliance

Transaction Processing/Controls &

Compliance

Lower total cost of Finance

Deliver Organizational Value

Business Finance

Corporate Finance

Decreased Cost

8 day Financial Statement Close

Current State Future State

Accounting Operations

Transaction Processing Areas

End-to-end Cost Decreases

Optimized Integration

Streamlined end to end processes are more efficient and effective. The cost of Finance will decrease, the value Finance provides

will increase, and the perception of Finance will improve.



High Quality in the “Last Mile of Finance” is designed to help deliver …

Reduced Complexity

Reduction of complexity through global process

standardization

Greater visibility of close process

Integrated and shared close calendar

Appropriate setting and consistency of materiality

thresholds

Documentation and training on the close process

Enhanced Controls

Enhanced enterprise-wide close process

coordination

Greater reliance on preventive rather than

detective controls

Corrections of errors moved closer to the “source”

Clearer definition of roles, responsibilities and

segregation of duties

Documentation of policies and control procedures

Reduced Financial Statement Risk

Transparency of financial statements to close

activities and vice versa

Ensures Completeness

Must be Accurate

Greater Efficiency

Reduction of low value-added work

Reduction of work duplication

More efficient task hand offs

Increased use of automation

Reduction in manual journal entries

Enhanced ability to identify and correct errors

Shorter Cycle Time

Reduction in time to close books

Time to focus on higher value added

activities

Improved speed of information delivery to

the business

Enhanced leverage of system

functionality

… which can help result in more time for finance to add value to the business

http://www.123rf.com/photo_3915363.html

www.trintech.com

Optimizing

the LAST MILE of

FINANCE

Optimizing the Last Mile of Finance-roadmap for continuous improvement

Margaret Kelly, CPA Financial Solutions, Trintech

Last Mile of Finance Process Timeline

Week -1 Week 1 Week 2 Week 3 Week 4

GL Closed

General Ledger Closed

Controller & CFO Reviews

Drafting of SEC Report

Drafting of Earnings Release

Financial Statement Analysis

Disclosure Committee Meeting

CEO Certification

Audit Committee

10Q Filed; ER

Published

Distribution of Drafts Week 4-5

Reconciliations

Internal Controls Review (ICFR)

Consolidations

Outsourced XBRL

Filing

The Last Mile – Resource Optimization

Work Load

100%

February March

80%

1 Cost

Reduction

1 - Eliminate manual work a) Right first time – reduction of corrections

performed during peak load b) Automation - cost reduction if the targeted

activity is performed during the peak load

2 – Evenly distribute the work load Moving activities from the peak load enables cost reduction and reallocated time to improve quality

2 2

Address bottlenecks to Improve Quality and Increase Efficiency

Sprint

Run

Crawl

Walk

Last 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

• Automated and collaborative global workflow

• Real-time process optimization

Effi

cie

ncy

, Tra

nsp

are

ncy

, Qu

alit

y

Co

st of Fin

ance

, Risk

Software solutions for Record to Report (RtoR)

Optimizing the “Last Mile” of Finance

Transactional Systems

Regulatory Authority

Reduce the Cost of Finance as a % of Revenue

14:

Production Platform ensures process discipline

Scope,

Schedule

Monitor/Record

Manage

Report

Plan

Perform

Repeatable Sustainable

Transparent

Universal Oversight of the Last Mile

Entity Hierarchy View

Close Calendar Management

18:

Pro-active, scheduled delivery of tasks

Integrated Last Mile of Finance Timeline

Week -1 Week 1 Week 2 Week 3 Week 4

GL Closed

General Ledger Closed

Controller & CFO Reviews

Drafting of SEC Report

Drafting of Earnings Release

Financial Statement Analysis

Disclosure Committee Meeting

CEO Certification

Audit Committee

10Q Filed; ER

Published

Distribution of Drafts Week 3-4

Reconciliations

Internal Controls Review (ICFR)

Consolidations

Integrated XBRL

Filing

Shortened Cycle and Cost

Savings

Software Solutions For Those Who Seek To….

Institutionalize financial best practices

Centralize close tasklist, updated real-time as work is performed

Self document controls during execution

Identify, escalate, and track issues through resolution

Achieve fully documented, paper-less close process from record to reporting

Angela Stephens,

Senior Vice President – Controller

Overview

• #1 Flavored CSD company in U.S.

• One of the top 3 North America LRBs

• Key brands include: DP, 7UP, A&W,

Sunkist, Canada Dry, Crush, Hawaiian

Punch, Mott’s and Snapple

• Revenues of $5.9 billion; Market Cap

$8.4 billion – FY 2011

• Approximately 19,000 employees in 150

principal locations

• Centralization began in 2004

• Current portfolio includes: Master Data, Customer Trade Accounting,

A/P, A/R, Fixed Assets and Cash Accounting

• Genpact is 3rd party outsourcer - located in Delhi and Hyderabad, India

• 335 Total Employees (208 DPSG / 127 Genpact)

• Main locations are Delhi, India and Plano, Texas

DPSG

Shared

Services

Center

DPS last mile of finance challenges…

Need to eliminate manual processes that are risk prone and time

consuming

– AssureNet will:

Automate the retrieval of account balances and activity, speeding the closing

processes (today it is all done manually in Excel spreadsheets)

Improve data accuracy – not only will the reconciliation process be faster, the

accuracy and validity of our current process in Excel is time consuming

Allow us to transfer time spent on transactional work to more analytical procedures

Need to improve data access

– With AssureNet:

Data is stored centrally, allowing us to access it quickly and securely – Now it is

maintained in our shared drives maintained by multiple business units

Internal and external auditors can be given access to all or select accounts

eliminating time-consuming “hand-offs” occurring now

Improved Standardization

– With AssureNet:

Allows multiple ledgers to perform reconciliations consistently – some reconciliations

are standardized but opportunities remain

Templates can be customized to meet DPS needs from variance reporting to risk

analysis

DPS last mile of finance challenges…

Need for enhanced workflow/task management

– With AssureNet:

We will be able to have visibility to the status of reconciliations throughout the process

- increasing accountability throughout the organization eases compliance monitoring

and creation of report statistics for KPIs.

Automated routing/notification of completed reconciliations to the reviewer

Roles and responsibilities around reconciliations will no longer need to be manually

documented in Excel matrices – a well-defined user data base is maintained.

Improved Compliance and Risk Management

– With AssureNet:

Highlighting risks and opportunities within the balance sheet will no longer be reliant

on manual processes – and can be standardized.

The certification capability will allow us to define rules within accounts prior to sign-off.

Dynamic risk ratings will allow us to continuously monitor our accounts as the balance

and other drivers change – balancing workloads where the risk is, versus lower risk

accounts

Speakers: • Margaret Kelly – Trintech

[email protected]

• Gavin Backos – KPMG

[email protected]

• Angela Stephens – Dr. Pepper Snapple Group

Questions

Questions from the

audience?

mailto:[email protected]

mailto:[email protected]

Optimizing the Last Mile of Finance

Business

Transcript of Optimizing the Last Mile of Finance