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Tool sprawl curbs financial close


Many promising sprinters face a mental roadblock as they develop. Physical training and repetition propel them faster and faster, yet despite pushing their body harder each month, most still plateau. It often takes a wise coach to switch a sprinter’s mindset from simply moving quickly to moving their body with purpose, using better technique, and taking longer strides.

Finance teams face a similar predicament with their monthly financial close process. The process is acceptable, and may even perform well at times, but there can be a lot of manual tasks and specialized tools that may cap maximum speed as the team sprints toward the end of the month. 

The effects of tool sprawl often manifest in the simplest tasks. Something that should take a few seconds or minutes is actually overcomplicated, requiring the same time consuming, manual steps, and multiple tools associated with larger tasks. The impact of these cumbersome processes is very difficult to measure, as are the hidden costs. There are opportunity costs associated with tool sprawl, such as increased staffing to address bottlenecks and more errors in general.  Moreover, there is the very real cost of government-assessed fines that can be imposed when mistakes go undetected.

The modern spreadsheet is impressive, but when talking about specialized tools being a hinderance to a swift close, it is a foundational culprit. Spreadsheet applications were designed for accountants. The ability to calculate, organize, and problem solve using a spreadsheet on a desktop computer remains groundbreaking to this day.  As companies scale and departments grow, the natural inclination is to stick with the tool because it has a low training curve.

However, the challenge comes with collaboration. The month-end close often involves several team members locked in a slow-moving, highly manual process of updating, uploading, and communicating around spreadsheets. Many organizations have built robust close processes based on spreadsheets, resulting in on-time completion and met deadlines. Because the system works, most have been content to tinker around the edges instead of considering ways to streamline the whole close process

 

It’s not hard to imagine a scenario like this:

An accountant is given a value he needs to adjust for the monthly financial close, so he downloads the most recent spreadsheet to edit. He then exports and uploads it into the company’s financial system. Sometimes that system will reject the upload with minimal explanation, so the accountant must compare, correct, and export it once again. Once confirmed, he now opens another system, his email, to prompt his colleague or supervisor to review. If there are any issues, the two must connect through a video conference or share screenshots to get to the root of the problem.

When ServiceNow started taking longer strides internally with our Financial Close Automation app, we saw a 13% increase in efficiency and saved over 560 hours monthly in the first year. We evolved from spreadsheets, phone calls, emails, and manual reports to workflows, automation, real-time predictive analytics, and a connected finance team on a single platform. This allowed our finance team to focus on high value activities such as strategic planning and management.

 

 

Having a single platform to manage the financial close that connects with your ERP system can help reduce opportunity costs. Finance teams also benefit from:

  • Less risk of data inconsistency - Tasks that are typically managed either manually or by disconnected third-party systems now have a single source of truth, with transparency into modifications. Anyone within your organization can track progress or raise an alert, which can help cut down on mistakes in final reporting that can hurt credibility with external stakeholders.

  • Increased team satisfaction – Good communication is the antidote to frustration. When everyone is working off of the same information and not jumping from application to application, it means fewer unnecessary emails and meetings. 

  • Accelerated Financial Close – Swift responses and approvals, workflows that streamline the process, and a direct connection to your ERP system will help eliminate repetitive, tedious tasks and get you to the finish line faster.

  • A chance to scale - Tool sprawl doesn’t scale.  When companies grow (which every company aspires to do), finance teams don’t have the luxury to hire more people and just ‘throw bodies’ at the bottlenecks.

By eliminating tool sprawl and racing to embrace modern workflows, ServiceNow has enjoyed an annual savings of nearly $750,000 and shaved a day off of our month-end close. No more cloud sync errors and no more swivel-chairing between different applications. 

Jog with us for a few laps and learn a little bit more about how ServiceNow uses Finance Close Automation. 

 

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