Finance Transformation Sets Course for Future Success Client Snapshot Profile A U.S.-based global skincare company was unable to provide timely financial reporting and performance analytics to its key stakeholders and private equity sponsor. Client Situation This client’s book close was historically a perpetual process, routinely exceeding 40 days. As a result, financial reporting was not timely, and it did not include insightful analytics to inform and drive future business decisions. While the company prepared annual budgets, routine financial forecasts had historically not been produced. Work Performed Protiviti partnered with the company’s CFO, VP of Finance, Controller, and key stakeholders to assess and redesign the book close, reporting, and forecasting processes. The client’s overall goal was to transform how its finance organisation would meet the demands for greater transparency around financial results and more informed data-driven decision making. Outcome/Benefits Accelerated book close by 25+ days, including a reduction in inventory close time from five days to four hours | Enhanced monthly financial reporting using analytics, providing increased transparency to key stakeholders and private equity sponsors | Developed a formal quarterly estimate process, including building financial models and increasing cross-functional partnership The challengeThe client’s private equity sponsor was seeking a partner to assist in the holistic transformation of its finance function so that timely visibility into the company’s financial performance could be produced on a routine basis. To determine the gaps and challenges across the organisation, Protiviti initially performed an assessment of the client’s current state based on the six elements of infrastructure. From an organisational perspective, resources were overleveraged, lacking strategic focus and transparency around roles and responsibilities. Finance and accounting processes were not standardised and highly manual, with limited flexibility for process changes. Accounting policies and guidance on complex transactions, including acquisitions, lacked formality and consistency of application. The finance team was focused on data aggregation due to the limited use of technology and its ability to produce multi-dimensional reporting, as opposed to providing insights and analysis to articulate business performance and support critical business decisions. The company also lacked a formal strategic and financial planning framework.Based on the results of the assessment, Protiviti developed a roadmap to establish the infrastructure necessary for the client to be capable of executing a sustainable and efficient end-to-end financial process to achieve:Operational soundness to allow for strategic exploration and prioritisation critical to scale the company’s footprint through acquisitions and sales growth.Improved customer experience, stakeholder value, and increased transparency to key stakeholders and private equity sponsor.Increased compliance within an accelerated cycle time resulting in end-to-end close, reporting, and forecasting by future goal of business day 15.Optimised reporting with real-time and forward-looking insight through a comprehensive forecast.Positive impact to the bottom line via sustainable automation and process stabilisation and improved use of current tools such as NetSuite.Nimble and standardised automated reporting.Transformation to achieve client goalsTo meet the client’s goals, Protiviti provided formal recommendations and worked in partnership with the client to drive end-to-end transformation, which included:Establishing an accelerated close of 10 business days by automating critical, time-consuming month-end closing elements.Formally documenting critical accounting policies and positions, ensuring consistency of application.Automating inventory accounting and performing SKU validation, eliminating the need for manual month-end inventory adjustments.Developing and automating consolidation process and disciplines to account for international entities, including multi-currency accounting and intercompany eliminations within the GL system.Redesigning and automating a standard monthly reporting package inclusive of KPIs, variance analysis, and performance analytics, provided to private equity sponsor within 15 business days after month-end.Building and automating a formal Statement of Cash Flows in accordance with US GAAP, incorporating multi-currency considerations.Establishing a formal quarterly forecast process, including building industry-relevant driver-based financial models, increased cross-functional participation, and augmenting the client’s team with expert FP&A resources.Enhancing business partnerships across the organisation, working collaboratively to align strategic and operational objectives to the financial plan and drive more informed business decisions.Developing templates and checklists to standardise close, reporting and forecasting processes, enabling the team to deliver timely, consistent, and higher-quality work.Providing oversight and overall project management which facilitated a structured transformation process and change management.The confidence to move forwardBy optimising the use of technology and formalising key finance and accounting processes, the company was able to accelerate and standardise the close process, unlocking more time to analyse results and improve efficiencies throughout the annual audit process.By standardising and enhancing the monthly financial reporting package, inclusive of KPIs and analytics, the company was able to provide greater and more timely visibility of key performance drivers, as well as to build greater trust and transparency with its private equity sponsor.By establishing a formal quarterly forecast process, the company was able to proactively identify key risks and opportunities to support and drive critical business decisions, as well as improve cross-functional collaboration and alignment across strategic, business and financial plans. The client gained more timely, valuable insights needed to make more informed business decisions, navigate key business risks and align decisions with the company’s long-term strategies. Topics Business Performance Industries Consumer Goods Consumer Products & Services We recommend these resources Pro Building office Finance and Accounting Process Optimisation We show you how to align organisational structure with business objectives so you’re in control, and how to proactively manage programme costs instead of reacting to challenges. You gain effectiveness and efficiency that positions the organisation for growth. Pro Document Files Private Equity Protiviti Private Equity consulting experts focus on the Private Equity firms’ deal thesis for each portfolio company, balancing strong EBITDA growth with prudent controls and compliance.