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11099Financial Reconciliation

Automating and streamlining financial reconciliation using Oracle

Business Intelligence

Feb 28 2019

Kalai SelvanPrincipalAgilentPoint

Company Information - AgilentPoint

Serving federal, state and local, commercial and non profit clients since 2006

Prime focus in Oracle software and hardware engagements

Strong in Public sector domain

Proven history of executing large multiyear and complex projects

Adept in aspects from business capture contract negotiations and project execution and services delivery

AgendaWhat is Financial Reconciliation?1

What challenges are we trying to solve?2

Why do we have to solve it?3

What options are available?4

How OBIEE can help resolve these challenges?5

Questions and Answers6

What is Financial Reconciliation?

• Comparing transactions and activity to supporting documentation

• Identifying and resolving discrepancies

• Ensuring accuracy and validity of financial information

It is predominantly account reconciliation

v In simpler terms, ensures that balances of two accounts are in agreement.

v A critical internal control activity for financial reporting.

v Public companies have to perform account reconciliation as part of the financial close

v Sarbanes-Oxley Act (SOX) passed in 2002 emphasizes the need for balance sheet

account reconciliation to be included within a company’s own procedures.

What challenges are we trying to solve?

Manual tasksMore than half of the firms in United States and Canada rely on manual processes for account reconciliation.

Disparate systems• Stand-alone accounting

systems• Multiple (internal and

external) systems for back-office functions

Inefficient processes• Lack of visibility on

reconciliation processes• Activities are tracked via emails

and manual check lists• Cannot identify repetitive issues

o Delays in closing the bookso Risks in complying with

internal controls

Source: Benchmarking (2018) Accounting and Finance functions by Robert Half.

Why do we have to solve it?

• Internal controls compliance, rising demands for compliance in general

• Faster reconciliation of accounts

• Reduction of time and effort in closing the books and financial reporting

• Some intrinsic benefits Jv Less chaos during the period end closev Cut down the long hours and weekends to close the booksv Focus on more value added tasks

What options are available?

E.g. Oracle Account Reconciliation Cloud

Service

Implement a third party OnPremise solution. E.g. Accounts Reconciliations Manager module with Hyperion Financial Close Management

Build an internal reconciliation solution either on-premises or on the cloud.Implement a third party

Cloud Solution

What if my organization has implemented

OBIEE and third-party reconciliation solution is not planned for in

the near term?

What products are included in OBIEE?

Oracle Business Intelligence Suite Extended Edition includes the following products• Oracle Business Intelligence Server Enterprise Edition• Oracle Business Intelligence Answers• Oracle Business Intelligence Interactive Dashboards• Oracle Business Intelligence Publisher• Oracle Business Intelligence Delivers• Oracle Business Intelligence Server Administrator• Oracle WebLogic Server Standard Edition

Note: Your organization may not have licensed all of the above mentioned products unless thelicense is for Extended Edition.

What OBIEE features can help with Financial Reconciliation?Oracle Business Intelligence Interactive Dashboards

Provides personalized views of information which include reports with prompts and various ways to visualize business data

Oracle Business Intelligence Answers

Provides ad-hoc query capabilities and the ability to create Oracle Business Intelligence Interactive Dashboards

Oracle Business Intelligence Publisher

A reporting solution used to author, manage, and deliver reports and documents

Oracle Business Intelligence Delivers

Enables creation and management of multi-step, multi-person and multi-application analytical workflows that provide business activity monitoring

How to leverage the OBIEE features for financial reconciliation?In its simplest form the reconciliation solution should be able analyze a given sets of records, identify records that match and those that does not match• Ingest (and expose) the data to be reconciled into a database

§ Use Oracle Data Integrator or another ETL tool of choice to ingest the data from various data sources including databases and files such as Excel.

§ It is recommended to pre-process the data (e.g. bank statements) while ingesting in order to make it easier for the users to analyze and reconcile.

§ Ensure that the columns within the subject area(s) have user friendly names.• Now we can build “Analysis” with OBIEE Answers to records that match and do not match.

§ We can use features such as pivot tables and filters to help our analysis.§ The analysis can be performed using the data in an external Excel file as well.

• The above approach will provide the minimum viable features needed for reconciling. The data is stored and analyzed in a single location, ensuring that there is a single source of reference.

Add more features incrementally

• The reconciliation solution can be further improved to include more features such as

v Key Performance Indicators (KPIs), for example, percentage of transactions that are not

reconciling

v Aging of the transactions identified for manual reconciliation

v Notifications based on predefined events, for example an unreconciled transaction ages

beyond certain number of days

v BI Publisher can be used to build and generate the reconciliation reports

Automate the reconciliation using Machine Learning• Predictive models can be built using “R” to automate matching the data that may not easily lend

itself to reconcile using traditional programming techniques

• OBIEE 12c supports embedded R execution

• Libraries in ”R” are available for data matching, also known as record linkage.

• A data scientist can build prediction model for reconciliation using various statistical approaches

• This model can be executed within OBIEE to analyze and reconcile the data

• The output of the model will be:

§ Data that reconcile

§ Data that do not reconcile and,

§ Data that potentially reconcile but require manual verification

• The above approach will significantly reduce the manual effort for reconciliation

Q&A

Session ID:

Remember to complete your evaluation for this session within the app!

11099

kalai.selvan@agilentpoint.com