How Accounting Teams Can Embrace Digital Record-to-Report

Accounting teams are expected to do more than ever before, with their remits now including real-time and predictive reports. In order to meet such increased demand for information, it’s vital that new ways of working are embraced and the record-to-report (RTR) process represents a huge opportunity to move towards efficiency.

Digital RTR is efficient and cost-effective

When compared with traditional data gathering and manual transaction processing, EY found that digital RTR could reduce closing and reporting time by as much as 50%. Not only does this free up resources within the accounting team to allow them to use their skills on more complex work, it’s a cost-effective move for any business when implemented properly.

RTR automation

There is a wide selection of technology available to automate RTR and the key is to create a mix that will facilitate an end-to-end process. Involving everything from robotic process automation and machine learning to chatbots and blockchain will help to solve complex sub-processes including reconciliation, intercompany liaisons, foreign currency and report publications.

Benefits of digital RTR

Embracing digital RTR will allow accounting teams to be:

• More responsive to inventory accounting, updating revenue recognition and providing more bundled revenue services.
• More insightful with regard to long-term value measurements for the future to be published on self-service portals and made available on mobile devices.
• More efficient when using financial accounting systems, which are standardized, integrated and automated.
• Better at creating more digital audits, both internal and external.

Robotic process automation and blockchain

Research from Deloitte found 58.2% of finance professionals intend to leverage automation to improve efficiency within their companies. The same study discovered that internal controls would be the highest priority for focusing such efforts.

The two leading-edge solutions that have emerged to improve RTR efficiency are robotic process automation (RPA) and blockchain. Utilizing RPA to automate transactional and repetitive processes can help to significantly shorten timelines. For example, collecting values from multiple account heads and repositories and then preparing journals for accruals of expenses or purchases is a good use of the technology.

To optimize workflow when using RPA, journals should be spread throughout the month to prevent peaks occurring during the close period. Passing standard accruals in the lean period allows for a better spread and offers the opportunity to assess the risks and materiality to decide on any procedural changes that may be required.

When it comes to improving accuracy in reporting, blockchain distributed ledgers are an efficient system. They introduce auto-balance schedules every hour for both vendors and customers, improving the levels of control. In order for this system to work, there needs to be a high degree of collaboration between both the customer and vendor and the business with investors.

Learn more: How Will Blockchain Change Accounting?

Reporting for the strategic reassignment of resources

Effectively using blockchain and RPA for the purpose of RTR gives financial officers more time to analyze the results and complete more frequent reports. This enables businesses to focus on the right areas and reassign parts of the budget to operations that require more resources.

Operating models must reflect RTR upgrades

In order for companies to get the best return on investment for implementing RTR solutions, accounting teams must adjust the way they work to accommodate the changes. The technology can create a ripple effect throughout an organization, changing mindsets and operating models to drive continuous improvement.

The entire finance operating model will be impacted by the introduction of digital RTR, so it’s vital careful consideration is given to this during the transformation process. Ensuring that work habits change to meet the new tools means upskilling employees, updating policies and defining clear data standards so there’s no ambiguity about what’s expected.

Areas of the financial operating model to consider are:

• Organization: Create a structure that delivers value to the company through efficient use of resources.
• Technology: Clearly outline the architecture of the finance system and the tools required to make it run seamlessly.
• Policy: Build a framework to demonstrate where global governance and risk management fits into the whole.
• Performance measurement: Create a global performance measurement system that focuses on continuous improvement.
• Process: Establish clear and efficient processes that are easy to follow.
• Data: Adhere to data standards.
• People: Upskill finance officers to promote a global finance community.