Closing the books to prepare financial statements has largely been the same process for decades – but that’s changing.
The increasing prevalence of AI now means that fully automated financial closing can take place without human involvement. Crucially, it is possible to deliver this in one day to save vital time for accountants and finance teams.
Historically, the financial closing process has been painstaking, often hindered by inefficient, manual spreadsheets and cumbersome processes across a variety of teams and systems. Finance teams must grapple with a vast web of convoluted details and tasks to arrive at conclusions, which are then presented to the board.
“An automated, connected financial close is often hindered by inefficient manual work, unwieldy spreadsheets and outdated close processes. Cumbersome account reconciliation is often cited as a leading cause of delays – making the financial close one of the least enjoyable aspects of an accountant’s responsibilities,” according to an innovation guide titled Accelerate an Automated, Connected Financial Close from enterprise cloud applications company Oracle.
Artificial intelligence paves the way for smoother financial close
There are areas within the financial close process that can be simplified, standardised, and connected. Finance teams should look at repetitive or lengthy tasks, such as those involving intercompany eliminations, account reconciliation, cash flow, foreign exchange, and minority interest.
For a transparent closing process, teams must track and share financial data using dashboards that can improve collaboration and provide timelines. These dashboards can connect stakeholders and reduce dependence on error-prone spreadsheet trackers.
Intelligent process automation (IPA) and machine learning can improve the extended close process by integrating AI into the close process. IPA – as an evolution of robotic process automation – layers of AI observe and analyse data, identifying new patterns or recommendi new rules. In addition, IPA can suggest how existing rules can be reconfigured to be more efficient, before finally applying the human judgment.
“IPA can significantly improve many tasks in accounting and finance such as account reconciliations, financial close process management, and statutory reporting. IPA can also help you automate much of the close orchestration and track the status of task completion across multiple systems, automatically kick off close processes as soon as dependent tasks are complete, and update the close calendar so you always know where you are in the financial close process,” according to an Oracle blog titled Five Steps To Automate Your Financial Close.
Oracle’s IPA-powered closing process
Oracle’s Cloud Applications with built-in IPA tools can aid decision-makers in the financial close process, helping streamline and speed up analysis, delivering precise figures and reports to measure outcomes and adjust plans as necessary.
Finance leaders, using Oracle’s IPA tools, can automate the complex orchestration of the financial close and monitor task status across multiple systems using intelligent process automation— an advanced new machine-learning-based technology.
Oracle offers comprehensive end-to-end capabilities that address every aspect of the financial close, covering financial consolidation, close process management, account reconciliation, tax provision and reporting, data integration and quality management, as well as narrative reporting. These capabilities are also designed to be easily configured by business users to fit their needs and can be quickly deployed.
Oracle’s innovation guide concludes: “Intelligent process automation takes over much of the work that makes the financial close process so frenetic and unmanageable.”
To learn more about how your finance team can benefit from Oracle’s IPA tools and cloud applications, download the free e-book here.