Financial controller: make sure you understand your consolidationsoftware8Minutes estimated reading time
Many companies employ knowledgeable financial controllers in Corporate Control departments. They are responsible for (part of) the periodic reports and internal reporting to management. In almost all cases, controllers use specific software to consolidate financial data. Now, a controller does not have to be or become an "IT guy. Still, I think it makes sense for financial controllers to also understand how consolidation is set up and works in the software. Below I elaborate on the 5 main reasons.
1. Faster and more streamlined periodic closures.
When controllers know how the consolidation software is set up and works, it will lead to faster and more streamlined closures. They can then better anticipate any changes in the application and will realize that last minute changes to the consolidation model are not always possible.
As a result, changes will be requested and processed on time. In addition, ambiguities during closures will be resolved more quickly. This includes, for example, validations on the supplied data that do not validate and that people do not know how to resolve.
Because this is a continuous (learning) process, periodic closings are becoming easier and faster.
2. Better understanding of the consolidation process in software.
Consolidation software should be supportive of business processes. In this case, creating internal and external reports. This means that depending on the functionalities of the software, creative solutions must sometimes be devised. When controllers understand that the software cannot do "everything," and that creative solutions are needed, it leads to greater understanding and better discussions with those who maintain the software.
The fact is that when time is made in advance to gain knowledge of the consolidation model, there is more time for meaningful checks and analysis. And after all, that's what it's all about!
3. Decision making for (complex) software changes.
It is important that there is meaningful discussion and faster decision-making when changes in software are made. Especially with the more complex issues such as acquisition, divestiture, liquidation or a move within the group. It is also important that those who do software maintenance be involved early on. They can have important input.
This meaningful discussion and faster decision-making with those who maintain the software can only happen if controllers are knowledgeable about the consolidation model. They then know what needs to be done in the software, what the consequences are, and can participate in any creative solutions. That way, these changes can be made quickly and in a timely manner.
4. Using Excel add-ins
Controllers make extensive use of Excel add-ins. These allow the creation of reports in Excel using data from the consolidation software. This is very convenient, but a few comments are in order.
It is Excel, which means that the data shown is not necessarily the data as it appears in the consolidation model. This is partly because the data retrieved in Excel can be changed.
In addition, it is important that the controllers who use these add-ins for reporting know the consolidation model with all its dimensions very well. After all, you get to see what you retrieve through the add-in. I have experienced many times that the data from the consolidation model shown in Excel was "not correct. Almost always it turned out that the Excel report that retrieved the data from the consolidation model was not correctly defined.
5. Increased confidence in reported numbers
And last but not least: confidence in the numbers! This is actually the most important thing of all. The more knowledge of and grip on the consolidation software the Corporate Control department has, the more confidence there is in the periodic figures. The necessary maintenance is faster and better, there is less stress during the closings, and it will be possible to close in fewer working days.
Conclusion
Consolidation software is business-critical software. Then it is important that there is a certain level of knowledge of it within the company, so you are not dependent on an external party. The first 4 reasons I mentioned lead to reason 5: confidence in the numbers. It is crucial that the Corporate Control department and the CFO know that the reported data is accurate and complete. Not only because reliable consolidation software is used, but also because you know that the controllers know and understand the software. Software should never be a black box.
About the author
Frank Kokshoorn is a recognized finance and EPM professional with extensive knowledge of financial processes within a wide range of industries. He has 20+ years of EPM experience in (re)designing, implementing, maintaining and supporting EPM solutions and processes with a focus on HFM and more recently on OneStream and Oracle EPM.
