In the race for digital transformation, financial consolidation is an easy process to overlook. If it seems to be “working,” many CFOs choose to focus innovation efforts elsewhere. However, treating consolidation as a secondary concern is a dangerous strategy.
A legacy consolidation system is much like an old smartphone: it can’t run the latest apps, it can’t hold a charge, and it constantly crashes. It might still function, but at what cost?
Key Indicators of a Costly Consolidation Process
Is your “engine room” actually draining your resources? You may be dealing with a costly, outdated process if any of the following apply to your organization:
- The Six-Day Barrier: Your monthly or quarterly close regularly takes longer than six days.
- The Decade Rule: You haven’t replaced your consolidation software in over ten years.
- High Customization: The system requires heavy manual intervention for FX/currency conversions, intercompany eliminations, or M&A.
- Fragmentation: Your process is divided by “point solutions” (e.g., separate tools for account reconciliation, local close, and reporting).
If these situations sound familiar, you have likely accepted slow data processing, IT dependency, and a proliferation of Excel workbooks as “normal”. They are not.
How Legacy Systems Drain Your Resources
Venture beyond the surface and discover how the “status quo” drains your business of time, budget, and brain power in ways that often stay invisible until a crisis hits.
1. Increased Risk of Financial Statement Errors
There is a direct link between effort and accuracy: if a consolidation process is onerous, the chances are it’s erroneous too. It is far too easy to gloss over a duplicate figure or miss a decimal when you’ve spent eight hours zoomed out on Excel. When processes are manual, the risk of misstatements is dangerously high.
2. Bloated Headcount and IT Overload
Without automation, complexity increases to the point where it can only be addressed by an ever-increasing headcount. Furthermore, legacy systems inundate IT departments with custom coding for structural changes, like new regulatory requirements or integrations. Modernization enables your staff to shift to value-driven tasks such as analysis and strategy.
3. “Information Poverty” in Decision Making
The C-suite now expects finance to be a strategic partner. However, if your consolidation isn’t orchestrated properly, your reporting and analytics are built on a shaky foundation. This means the advice finance provides is often based on insufficient or inadequate information.
4. Proven ROI and Strategic Agility
Modernizing is not just about avoiding errors; it’s about the Return on Investment. Accurate group consolidation, automated account reconciliation, and faster processing deliver a clear, immediate impact on the bottom line.
Evolution is Easier Than You Think
The path to a modernized close doesn’t have to be a multi-year struggle. By moving away from “onerous” manual processes and embracing automation, you ensure your finance team is at the helm of critical decision-making.
Ready to stop the drain on your resources? Download the full whitepaper.