Managing editor at FSN and author of “Fast Close to the Max” Gary Simon talks about Hyland Software’s AFRM® and how it provides a platform geared toward the continuous improvement of the close process.
In the 2010 survey, Improving the Close, by the Institute of Management Administration (IOMA), finance and accounting managers involved in the close voted “Continuously Improving the Close Process” as the number one priority for close process improvement.
We agree that in order to improve the close, accounting and finance departments need to focus on continuous improvement, and not rely on one-time reengineering projects. There are several reasons for this preference:
- The close is a continuously changing process. The close is comprised of activities which cannot be handled by your automated systems. As time passes and a business changes due to many factors including growth, additional regulations, technological developments, global or competitive pressures, the activities in the close also change. These days one constant is change, therefore your close will always change and you will need a continually improving process to handle these new changes.
- Leverages proven methodology. Lean Six Sigma is a proven methodology which is based on continuous improvement and which has been successful for many years in business process optimization. We have experience making this methodology successful in Optimizing the Accounting Close and Financial Reporting.
- Making small improvements on a continuous basis lowers risk. The bigger the change made to the close process, the higher the implementation risk and the more disruption to the team. By making small meaningful incremental improvements, you can achieve long term process optimization at a very low risk and disruption.
- Small continuous improvements add up to significant results. Improving your close, just 1-2% each month will result in an improvement of over 30% in less than two years.
Seth Linebrink, manager of financial reporting and accounts payable at Invacare, elaborates on improvement in the close with AFRM’s® visibility.
In summary a continuous improvement based solution is a realistic long-term answer to a significant challenge in the Accounting and Finance function.
Continuous Improvement is the best methodology to fit the challenges of Financial Close Optimization including understaffed and overworked departments, limited available implementation time (in between closes), high probability of scope change and changes to business environment, and no close delay tolerance.
We so firmly believe this is the correct approach that we guarantee the results of the Continuous Improvement based methodology to Optimize your Financial Close process.