Protiviti helps global credit management company streamline account reconciliation processes

Change Requested

A major credit management company engaged Protiviti to help streamline and centralize its account reconciliation processes. At the time, general ledger balance sheet reconciliations were being performed by multiple groups within the company using different formats and inefficient manual processes. In addition, the company lacked a central repository for storing reconciliations and for generating reports on status, reconciliation variances and proposed adjustments to accounts. The existing practices made visibility into the status of account reconciliation and financial close-related tasks time-consuming and difficult for management to track. This posed a danger of disapproval by regulators, in addition to keeping costs high and bottom line low.

Change Envisioned

Our finance optimization experts performed a current state assessment of our client’s account reconciliation processes and identified areas for improvement. We then worked with the management team to implement a software solution to automate many of the process improvements and reduce the ongoing challenges encountered during the close-the-books process.

To ensure full utilization of the solution, we developed a training approach to provide the client’s internal teams with a smooth transition. We worked with internal change champions who helped establish support for the technology and served as “go-to” support after going live. Together, we held several training sessions to educate stakeholder groups on application functionality and processes. Throughout the project, we paid close attention to the specific needs of the users, making sure the implementation process fit with the unique culture of the company.

​Over the course of our engagement, we delivered the following benefits to our client:

• Governance – Established a structure and process to track ownership of account reconciliation preparation and close task completion, as well as centralized policies and procedures by reconciliation type.
• Standardization – Created a single centralized repository containing “one version of the truth” for all accounts, leading to improved access and accuracy of reporting by management.
• Automation – Identified configuration requirements for all reconciliation processes and financial closerelated tasks and configured the new application accordingly.
• Internal Controls Enhancement – Designed the reconciliation workflow with reminders of impending due dates and alerts for overdue reconciliations to improve the review process and ensure timely actions.
• Efficiencies/Cost Savings – Implemented auto-certification rules to automate the reconciliation of accounts that fit specific criteria, e.g., zero balance accounts, balances comprised of amortizable transactions, subledger to general ledger reconciliations, etc.
• Improved Reporting – Provided management a means to monitor cycle time for the performance of reconciliations.
• Transparency – Implemented a solution that allows management to ascertain completeness of the reconciliation process as it relates to balance sheet coverage.

Change Delivered

As a result of our work, our client was able to improve the accuracy of its general ledger and significantly reduce the effort and direct costs associated with each period’s month-end close. Our client was able to reduce manual spreadsheet entries, excessive employee hours, and the need to generate and rely on hard copies. In addition, the real-time visibility into the status of reconciliations helped reduce period-close uncertainty for management, as well as provided management a means to track the impact of required journal entries in any given close period. Most importantly, through the leveraging of better practices and increased quality of reconciliations, our client improved its status in the eyes of auditors who use reconciliations as a key control tool.

Protiviti’s Finance Optimization professionals help organizations reduce transaction processing time, cost and risk of errors, while increasing time spent on value-added activities.

Recent surveys have indicated that most finance organizations spend only 17 percent of their time on value-added activities, with much of the finance function’s capacity devoted to transaction processing instead of providing insightful information for decision-making. Numerous manual tasks, proliferation of spreadsheets, informal hand-offs and inadequate status tracking create a drag on efficiency and increase the risk of errors. Organizations that lack sufficient time for value-added activities often require more than five days to close the books, use a spreadsheet-based financial consolidation process, need many manual journal entries or other manual activities to close the books and lack the capacity to analyze business drivers and identify root causes.

Our Finance Optimization consultants help companies shrink transaction processing costs by up to 30 percent, reduce error rates by up to 90 percent and compress cycle times by up to 70 percent. We help clients implement standardization across business unit functions in processing information, submitting local ledgers and posting closing entries in order to lower exception rates and the level of rework needed.

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