5 steps for world class close

7/29/2019 5 Steps for World Class Close

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2011 MarketSphere Consulting, LLC

5 Steps to World Class CloseFebruary 25, 2011


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World Class Financial Close

Collect data Close AdjustmentsCurrencyI/C

Subsidiaries

ReportManagementLegal

External

Analyze

6 Days 12 Days *

Collect /Close Adjustments Reporting Analyze and Forecast


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Defining the Financial Close

Sub Ledger CloseGeneral

Ledger CloseData

AssuranceConsolidation

Internal MgmtReporting

ExternalFinancialReporting

Filing

Close Sub Ledgersinto GL (i.e. AR, AP,FA, etc.)

Perform Reconciliations

Bank Reconciliations Standard Account Recon Sub Ledger ReconPost Accruals

Deliver selfservice reportingto theorganization forperformancediscussions andplan realignment

Automate externalreporting

gatheringdisclosures andfinancialinformation

Automate anddeliver Edgar &XBRL filings,Statutory filings,Tax, etc.

Gather and validate

complete data sets tosupport all financialreporting needs (i.e.Legal Entity, Segment,Management, Tax,Sustainability Metrics,etc.)

Automate consolidatedfinancial reporting

leveraging multiplehierarchies/dimensionsand calculations (i.e. CTA,FASB, KPIs, FX,Retained Earnings,Topside Entries etc.)

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Critical Components to Implement

Transactions Reporting

FinancialConsolidation

DataAssurance Oracle Disclosure

Management

XBRL/SEC

Regulatory Reporting

Financial andMgmt. Reporting

ERP:Oracle, SAP,Legacy, Other

TaxFiling

Oracle Financial Close Management

CFO Dashboard

TaxCalculations

Governance, Risk & Compliance

Financial Close Best Practices

4 2011 Oracle Corporation


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The ERP to EPM Landscape

Creating Serenity out of Disparity

ERP

Operations

BI

Customers

MarketingSales

HRFinance

Executives

Cloud Computing

Planning Consolidations

Management Reporting

Vendors Tax

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The ERP to EPM Landscape

How do we get from here to there?

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We Must Begin Thinking End-to-End

Performance Issues:Having the right tool for the job is essential. Hammers and

screwdrivers.

Chart Issues:Many times organizations jump to the conclusion that they need

to re-implement their chart of accounts or possibly all of ERP.

Do you really want to do this every few years?

Reporting:Leverage EPM to enhance ERP reports . . . not replace them!

Source of Profit:ERP provides the base data; EPM provides the view.

Use of Capital:EPM can help unlock items buried in sub-ledgers. This

translates directly into managing shareholder value, cash, and

working capital.

Tactical

Strategic

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EPM Architecture

Essbase

Oracle ERP

Data Sources / ETL

FDM

SmartView: Ad Hoc Reporting

HFM

Management Reporting

and Analysis

Financial Applications Reporting & Analysis

EPMA/EAL

Other ERP

Other Data

Sources

Consolidated Financial

Statements: I/S, BS,

Cash Flow

Variance Analysis of Plan

vs. Forecast vs. Actual

What-if Analysis

(i.e. Rates)

Ad hoc Reporting

Product and

Customer

Profitability

Planning

EPMA

Consolidations

Financial

Reporting

Corporate Financial

Plan

Workforce Planning

CapEx

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StrategicFinance



5 Steps to World Class Close

Ensure financial data quality

Create an accountable organization

Improve transparency Automate reporting

Reduce the cost ofcompliance



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Financial Data Quality Management

Data cleansingandtransformation

Task scheduling

Text anddocumentarchive

Audit review

Data staging

Integration

Adapters

Prepackagedintegration

Data loading includingsupplemental data,

line item detail Dimensional mapping

verification

Process management

Excel

G/L

ERP

Flat files

ETLRepositories

Hyperion v11

FinancialManagement

Planning

Essbase

Data Marts

SourceSystems

Data

Preparation

Server

EPM

Systems

Guided Workflow

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Challenges with Financial Close

Many clients still use spreadsheet schedulesand cubicle-posted calendars to manage the

close process

The flow of activity is often disjointed; phone

calls, e-mail, and stop-bys are the means by

which the close is executed Corporate controllers lack visibility to status of

key tasks due to the use of various systems,

regions and departments

Too often the controller is left hoping everything

will work resulting in many late nights andoverburdened staff



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The Answer Financial Close Management

Financial Close Management is the first application of its kind offering

a full featured workflow solution to manage the entire close processfrom sub-ledger close to external filings.



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Process Monitoring

Dashboards and ad-hocreporting offers instant real timeinsight into the close processes

Easily illustrates currentprocess status

Automatically updates status onprocess tasks

Highlights which tasks are atrisk or behind schedule

Encourages continuous

improvement to the closeprocess



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Task Management

Take the slack out of theprocess

Task owners are notifiedimmediately when predecessortask are complete so work canbegin

Reassign tasks on the fly toprevent bottlenecks

Users can raise an alert to createvisibility and get additionalsupport

Users can be taken directly intounderlying systems to completetasks



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Active Financial Close Calendar

Details all the tasks requiredfor the financial closeprocess

Multiple views of closeprocess flow

Calendar view Tasklist view

Gantt view

Configurable for each user

MS Outlook Integration



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Auditability and Policy Compliance

Easily produce a Close Binderwith a complete history of theentire process

Communicate critical processdocumentation at the task level

Attach and report on backupdocumentation

Capture responses toquestionnaires and usercomments

Reduce audit effort and cost



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Moving Process Units through the Review Cycle

Manage Process

button

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Select process unit

Viewing Process Unit Status

Process unit status

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Lights-out processing

of common tasks

Single or multiple tasks

Data loading and validation

Consolidations

Reporting

On demand or scheduled

Recurring processes

Enhanced monitoring

and control of critical processes

Multiple servers, users and tasks

Automation and Monitoring

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Journals Close the Ledger and Keep it Closed

Speeds the financial closecycle

Full Dr/Cr Detail for TopSide

Adjustments

Line-item and journal level

text descriptions for full

documentation

Review/Approve/Reject

Workflow with

User/Date/Time Stamp

Ability to extract for posting

to Ledger, if needed

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Automatic match at firstcommon parent

IC Dimension for easy

reporting source vs.

destination

Email respective entities

directly from report

Standard Intercompany

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Reporting Overview

Reporting Options

Financial Reporting Graphical,object-oriented formatted reportingincluding HTML and PDF.

Web Analysis InteractiveDashboards for traffic lighting and

OLAP drill/pivot

SmartView MS-Office Add-in forExcel (ad hoc analysis), PowerPoint(board presentations) and Word(10Q/K)

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Challenges with the Last Mile

Management and creation of criticaldocuments is manual (Debt Covenants,

10Q/K, Board Package and

Presentation, etc.)

Desire to leverage existing applications

in an integrated manner

Must comply with the SEC mandated

XBRL requirements

Year 2 requirements even morechallenging

3rd party options are costly and mayelongate the process



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The Options were Limited

3rd parties like Bowne, Merrill are costly

Niche vendors are risky

10K/10Q

Etc.

NicheVendors



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The Answer Disclosure Management

Disclosure Management is a full featured XBRL solution that leveragesbest-in-class Oracle reporting technologies including Oracle Hyperion

Financial Reporting and Oracle Hyperion Smart View for Office.



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XBRL Reporting

A complete XBRL creation andmanagement solution

Enterprise XBRL mappings

Report tagging: Microsoft Office orOracle Hyperion Financial Reports

Metadata tagging: HFM, EPMA,Essbase, HP

Taxonomy management includingextension and version control

Support for multiple taxonomies

Instance document management Creation and validation



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A Single, Streamlined Process

Uses customer-favored MS-Office via Smart View with embedded XBRL

in metadata. Single source for 10K/10Q creation and XBRL output.

10K/10Q

No more 3rd parties. No more fees. No more data quality concerns.



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Case Study

Company Overview & Situation Leading burial products manufacturer in the world; recently

acquired a machinery manufacturer

The Hyperion platform implementation was initiated to solve

for business needs in three major financial processes:consolidation, financial reporting, and planning and

forecasting

The goal of the solution was to not only meet immediatebusiness needs, but provide a platform for future growth

MarketSphere Applied Expertise Leveraged MarketSpheres full-platform expertise to deliver a

roadmap initiative that included HFM/FDM/DM, Planning, and

Essbase HFM was initially implemented for the core business and

shortly after the completion of the project, was expanded toincorporate sub-consolidations and financial reporting newly

acquired company

Essbase was utilized to provide for CFO Handbook reporting

and analysis

Hyperion Planning was implemented to enable the business

to improve its planning and forecasting process

Disclosure Management was incorporated for the creation ofXBRL instance documents for the SEC

Benefits & Value Achieved Established a complete Enterprise Performance Management

platform to enable future growth, increased visibility to

financials for the entire company, and more robust reporting

and analysis

Automated the creation of the cash flow on a monthly basis

10K/10Q

Oracle HyperionDisclosureManagement

Oracle HyperionEnterprisePerformanceManagementApplications

Installsoftware

Align /map

financialsto XBRL

taxonomy

Input, testand

validatemappings

TrainDevelopXBRL

reporting


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Where Do I Start?

Step 6:

Performance

& Scenarios

Thin GL and HFM

Design Subject area

definition Data normalization

Workflow / Critical

Path Task Dependencies

Cycle TimeStandards

Reporting Entity

Elimination Consolidation Method

FX ProcessStandardization

Defined reporting

channels andmethods

Center ofExcellence

Corporate

Business

Unit

Cost Center

Report sets by user type

Standard Analytic

Framework

NFI (Non-Financial

Indicators)

Integrated Corporate

Performance

Event Driven Reporting

Visualization

Action-oriented

Internal and External

Financial Reporting

Automated Cash Flow

Treasury and BankReporting

Defined Data

Governance

MetadataManagement

First Pass Cycle Time

Consolidation Frequency

Test Case Performance

Application

Design andBuild

Step 5:

Quality &

DataMgmt

Step 4:

Reporting &

Analysis

Standards

Step 3:

Consolidation

& FX Logic

Step 2:Close

Calendar &

Playbook

Step 1:

Reporting

Elements

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Consider Leading Practices

Standard Chart of Accounts with automated

mapping to consolidations/reporting tool Record intercompany partner at the GL

transaction level

FX translation in the consolidation tool foreffective reporting and analysis

Legal, segment, and management reportingstructures in one application

Auditable data flow with drill-back to sourcedata

Distributed process management to improvecontrol and accuracy

Deep financial reporting and analysisdelivered self-service through the Web

Direct linkage to BOD/executivepresentations

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Kamron Miller, Practice Director, Consolidations & Financial Reporting

[email protected]

913.707.9607

5 steps for world class close

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