Shortening the time to close is a goal for just about every CFO, Controller and Finance/Accounting Team. Closing more quickly means a more efficient process, more time to generate insight and lower overall costs - as long as accuracy of close remains high.
According to the APQC General Accounting Open Standards Benchmarking survey (2,300 companies participated) - Cycle Time for Monthly close ranges from 4.8 days or less for the top 25% of companies to 10 days or more for the bottom 25% of performers.
Companies that close in half the time of other companies focus on the following:
No matter how efficient and thorough an organization’s accounting team, if it performs reconciliations manually or through “rules based matching”, it is always going to be lagging behind accounting teams that are automating the close process. This is because the manual reconciliation of an organization’s finances is time consuming, costly and prone to human error. More importantly, reconciliation errors having potentially major consequences to a company’s financial well being. High transaction volumes, multiple bank accounts, different transaction types, multiple currencies and various bank file formats only add to the problems.
According to a study by Robert Half & the Financial Executives Research Foundation (FERF), only 13% of F&A teams have utilized advancements in technology solutions like Sigma IQ, with the majority of CFO’s admitting they still struggle with painful aspects of account reconciliation like:
According to a financial accounting survey by EY, up to nearly 60% of a financial department’s resources are spent on managing transaction-intensive processes. What is worse, 95% of this effort is spent on transactions that already match, rather than problem entries that actually require attention, reducing the efficiency of the org and dramatically increasing the time it takes to close.
Fortunately, for finance teams A.I.-based solutions like Sigma IQ dramatically reduces both the time and resources required to close.
It is estimated that on average, a company with $100 million in sales, will unnecessarily waste 3-5 days to close each month, with most using rules-based matching and manual reconciliation.
Artificial Intelligence (AI) based reconciliation platforms, like Sigma IQ, solve this problem in a completely new way, dramatically reducing the human time investment required to close your books. On average, Sigma IQ can reduce the time to close by up to 90% and save hours per employee in labor time.
95% of account reconciliation effort is spent on transactions that already match, rather than problem entries that actually require attention, reducing the efficiency of the org and dramatically increasing the time it takes to close.
Sigma IQ’s Matching Engine uses artificial intelligence to completely automate the reconciliation process, removing the need for a team of accountants to reconcile transactions. Whether thousands or millions of transactions, Sigma IQ’s proprietary patent-pending AI-powered matching engine maximizes match performance and accuracy without the need for manual rules or updates.
Importantly, advanced solutions like Sigma IQ are cloud-based, meaning teams implement account reconciliation tools with no implementation costs and get up and running in less than a day. This means you can start reconciling and provides you with a positive ROI from day one.
Also, data security remains a critical goal. Since technologies like Sigma IQ are built on top of modern advancements in technology, COSO 13 security controls are part of the design from day one, keeping security and compliance at the forefront.
By using Sigma IQ, your finance team can achieve the following cost savings:
As more and more finance teams continue to automate their financial operations, AI-based reconciliation platforms like Sigma IQ, will dramatically reduce the time and cost associated with month-end-close.