Finance Transformation Sets Course for Future Success

The challenge

The 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 organization, Protiviti initially performed an assessment of the client’s current state based on the six elements of infrastructure. From an organizational perspective, resources were overleveraged, lacking strategic focus and transparency around roles and responsibilities.  Finance and accounting processes were not standardized 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 prioritization 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.
• Optimized reporting with real-time and forward-looking insight through a comprehensive forecast.
• Positive impact to the bottom line via sustainable automation and process stabilization and improved use of current tools such as NetSuite.
• Nimble and standardized automated reporting.

Transformation to achieve client goals

To 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 organization, working collaboratively to align strategic and operational objectives to the financial plan and drive more informed business decisions.
• Developing templates and checklists to standardize 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 forward

By optimizing the use of technology and formalizing key finance and accounting processes, the company was able to accelerate and standardize the close process, unlocking more time to analyze results and improve efficiencies throughout the annual audit process.

By standardizing 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.