The account-to-report (or record-to-report) domain—which covers the general ledger, period end closing activities, credit management, bank and tax accounting, dunning, and accounts receivables processes (among others)—is an essential contributor to F&A’s ability to reach peak performance at any given organization.
Account-to-Report Excellence at World-Class Organizations
The Hackett Group analyzed their 2021 benchmarks and discovered that account-to-report processes at digital world-class finance organizations significantly outperform more typical organizations. Notably, they found that world-class companies have simplified, standardized, and automated a greater share of their F&A activities. This has freed up capacity to engage in knowledge-based work such as transforming raw transactional data into valuable information for other parts of the enterprise.
Traditionally, teams in the account-to-report domain compile and reconcile core transactional data to deliver required information and reports. However, account-to-report has assumed a broader role at elite finance functions. Increasingly, F&A executives are leading the transformation of the finance organization by dismantling traditional process and data silos and providing other parts of finance with enriched data. The convergence of the accounting and planning processes greatly enhances the speed and value of decision support insights.
The Hackett Group has identified three focus areas that will help to free up capacity to engage in value-creating activities, all while ensuring high levels of control and compliance.
Account-to-report, intercompany, and general ledger process costs at digital world-class finance organizations are significantly lower than more typical peers. These lower costs reflect higher productivity. For example, at digital world-class functions, the general accounting and reporting process involves 52% fewer staff than at peer group functions, and the gap is even wider in intercompany accounting.
To achieve superior process performance, teams at world-class finance organizations have made significant headway in simplifying and standardizing processes. For example, they have consolidated and reduced the number of active accounts in the chart of accounts, operating with 57% fewer accounts compared to peers. In addition, they are more likely to have standard policies and procedures for general accounting and external reporting and are significantly more likely to have standard intercompany accounting policies.
Standardized and simplified processes are more easily automated. For many organizations, manual effort in accounting remains a pain point. Hackett research (Account-to-Report Performance Study, 2020) shows that the number one concern related to accounting and reconciliation among leaders is the high level of manual effort required. In their Cognitive Automation Poll (2021), Hackett found that 50% of typical F&A activities are executed manually, largely because of high levels of process variability.
How to Achieve World-Class Finance Performance
For account-to-report organizations currently supporting finance organizations aiming for digital world-class performance, Hackett recommends several action items.
Gain a Mandate to Standardize
Obtain finance leadership’s support for moving toward a global template approach to the execution of the account-to- report process. This support will also be necessary when managing associated organizational culture change. Ensure strong communication and design a comprehensive change management strategy to overcome resistance.
Invest in Securing & Retaining the Best Talent
Recognize the importance of people in achieving effective transformation. Ensure leaders have
a blend of skills including business knowledge, accounting and control instincts, understanding of data, technology and process- design capabilities, and a project-management orientation. Have a plan to retain this talent by providing a positive, supportive environment.
Because process excellence is essential to the success of finance organizations, it is incumbent on account-to-report executives to optimize accounting processes. Get your copy of the full report for perspectives from The Hackett Group and uncover full details on:
- What high-performing teams are doing differently to contribute greater value to their organizations
- Ways in which digital world-class finance functions are achieving process excellence and outperforming their peers
- Next steps account-to-report executives should take to optimize accounting processes