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These speakers offer a roadmap for continuous improvement and a case study from Dr. Pepper Snapple Group
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www.trintech.com
Optimizing
the LAST MILE of
FINANCE
“Optimizing The Last Mile Of Finance” Margaret Kelly, CPA
Financial Solutions, Trintech
Gavin Backos
KPMG Advisory Services
Angela Stephens
SVP, Controller-Dr Pepper Snapple Group
Agenda
• Introductions
• Last Mile of Finance Transformation – Gavin Backos, KPMG
• Roadmap for Continuous Improvement-Margaret Kelly, Trintech
• Case Study from Dr. Pepper Snapple Group: challenges and solution for account reconciliation process-Angela Stephens
Last Mile of
Finance
Gavin Backos
March 9, 2012
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL 4 KPMG – Last Mile of Finance
Finance Transformation
How different Firms define Finance Transformation
Finance Transformation is defined slightly different, but ultimately it is all about efficiency, effectiveness and change
4
In today’s market, finance functions are
under increasing pressure to improve
performance. Source: Ernst & Young Web Site
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL 5 KPMG – Last Mile of Finance
Technology enablers for the Last Mile of Finance (Record to Report- R2R
Process)
Technologies enable various layers of effective control and execution throughout the R2R process.
Close and Reporting Cycle
Time to Close Time to
Consolidate Time to Report
Procure to Pay
Order to Cash
Fixed Assets
Payroll
General Ledger
Close
Non-Financial
Information
Consolidation
Process
Internal
Reporting
External
Reporting
Regulatory
Reporting
Governance
Organization and People (Roles and Responsibilities)
Policies and Procedures
Information Systems and Technology
Account Reconciliations
Close Cycle &
Task Management
Transaction Matching &
Operational Reconciliations
Variance Analysis
Consolidation Management
Journal Entry Management
External Financial
Reporting & XBRL
Compliance & ERM
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL 6 KPMG – Last Mile of Finance
Define the Last Mile of Finance
Understand what creates value and how to mitigate Risk
1. Transaction processing
Eliminate delays through auto
scheduling and removal of manual
interfaces
Tighten up cut off procedures
Address data integrity with more
effective validation processes
Interface validation and monitoring
Create an Operational Close
process
Robust SLAs with IT
1
2. General ledger close
Enthusiastic & Qualified people
Rigor & discipline – comprehensive
close calendar & checklist tied to
documented process, policy, &
controls
Only necessary manual JE’s
Implement automatic and detective
controls
Automate & standardize
reconciliations
2
3. Consolidation process
Use technology to accommodate
complex legal structures
Automate data integration
Standardize all chart of accounts
Set a robust and disciplined Inter-
company process & policy
Eliminate non-standard
consolidation adjustments
Integrate disclosure data
requirements with the COA or data
collection process
3
4. Reporting and analysis
Clearly defined reporting strategy
tied to overall company strategy
Leverage ERP, Business
Intelligence tools, & ODS/DW
Spreadsheets used for presentation
and delivery ONLY
Tighten up all data sources and
store in an ODS/DW
Actuals, Budget, & Forecast data
centrally stored and harmonized
4
Improve the close and reporting cycle while reducing Financial Statement Risk
Stakeholders
Company
Strategy
Reporting
Strategy &
Requirements
Performance
Management
Users
Local/Group GAAP
Reporting Plans,
Budgets, and
Forecasts
Management
Information
Other External Reporting
Transaction
Processing
General Ledger
Close
Non-financial
Information
Time to Close Time to
Consolidate Time to Report
Governance
Organization and People (e.g., structure, roles, and responsibilities)
Process (e.g., policies, procedures, controls, operations & chart of accounts)
Information Systems/Technology
1
2 Consolidation
Process
3
Internal Reporting
External Reporting
Regulatory Reporting
4
Close Operations and Reporting Cycles
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL 7 KPMG – Last Mile of Finance
Creating value
The cost and value of finance
Business Financial Support
Business & Financial Analysis
Transaction Processing/Controls &
Compliance
Transaction Processing/Controls &
Compliance
Lower total cost of Finance
Deliver Organizational Value
Business Finance
Corporate Finance
Decreased Cost
8 day Financial Statement Close
Current State Future State
Accounting Operations
Transaction Processing Areas
End-to-end Cost Decreases
Optimized Integration
Streamlined end to end processes are more efficient and effective. The cost of Finance will decrease, the value Finance provides
will increase, and the perception of Finance will improve.
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25302ATL 8 KPMG – Last Mile of Finance
High Quality in the “Last Mile of Finance” is designed to help deliver …
Reduced Complexity
Reduction of complexity through global process
standardization
Greater visibility of close process
Integrated and shared close calendar
Appropriate setting and consistency of materiality
thresholds
Documentation and training on the close process
Enhanced Controls
Enhanced enterprise-wide close process
coordination
Greater reliance on preventive rather than
detective controls
Corrections of errors moved closer to the “source”
Clearer definition of roles, responsibilities and
segregation of duties
Documentation of policies and control procedures
Reduced Financial Statement Risk
Transparency of financial statements to close
activities and vice versa
Ensures Completeness
Must be Accurate
Greater Efficiency
Reduction of low value-added work
Reduction of work duplication
More efficient task hand offs
Increased use of automation
Reduction in manual journal entries
Enhanced ability to identify and correct errors
Shorter Cycle Time
Reduction in time to close books
Time to focus on higher value added
activities
Improved speed of information delivery to
the business
Enhanced leverage of system
functionality
… which can help result in more time for finance to add value to the business
www.trintech.com
Optimizing
the LAST MILE of
FINANCE
Optimizing the Last Mile of Finance-roadmap for continuous improvement
Margaret Kelly, CPA Financial Solutions, Trintech
Last Mile of Finance Process Timeline
Week -1 Week 1 Week 2 Week 3 Week 4
GL Closed
General Ledger Closed
Controller & CFO Reviews
Drafting of SEC Report
Drafting of Earnings Release
Financial Statement Analysis
Disclosure Committee Meeting
CEO Certification
Audit Committee
10Q Filed; ER
Published
Distribution of Drafts Week 4-5
Reconciliations
Internal Controls Review (ICFR)
Consolidations
Outsourced XBRL
Filing
The Last Mile – Resource Optimization
Work Load
100%
February March
80%
1 Cost
Reduction
1 - Eliminate manual work a) Right first time – reduction of corrections
performed during peak load b) Automation - cost reduction if the targeted
activity is performed during the peak load
2 – Evenly distribute the work load Moving activities from the peak load enables cost reduction and reallocated time to improve quality
2 2
Address bottlenecks to Improve Quality and Increase Efficiency
Sprint
Run
Crawl
Walk
Last Mile of Finance Maturity Model
Manual Process Improvements
• (Manual) detective controls & procedures
• Manual process improvements
• Legacy apps • Heavy spreadsheet
use • Email, Word, shared
drives
Semi-Automated Process
• Semi-automated controls
• Point solutions for collaboration (e.g. SharePoint), process management and compliance
• Lack of controls across data streams
• No single view into close and reporting process
Manual Processes
• Disjointed processes • Legacy apps • Heavy spreadsheet
use • Email, Word, shared
drives
Fully-Automated & Optimized
• Best practices • (Automated)
preventive controls embedded into business process
• Consolidated view into close & reporting process
• Fully integrated with XBRL, close, exception mgt, reconciliations, and compliance
• Automated and collaborative global workflow
• Real-time process optimization
Effi
cie
ncy
, Tra
nsp
are
ncy
, Qu
alit
y
Co
st of Fin
ance
, Risk
Software solutions for Record to Report (RtoR)
Optimizing the “Last Mile” of Finance
Transactional Systems
Regulatory Authority
Reduce the Cost of Finance as a % of Revenue
14:
Production Platform ensures process discipline
Scope,
Schedule
Monitor/Record
Manage
Report
Plan
Perform
Repeatable Sustainable
Transparent
Universal Oversight of the Last Mile
Entity Hierarchy View
Close Calendar Management
18:
Pro-active, scheduled delivery of tasks
Integrated Last Mile of Finance Timeline
Week -1 Week 1 Week 2 Week 3 Week 4
GL Closed
General Ledger Closed
Controller & CFO Reviews
Drafting of SEC Report
Drafting of Earnings Release
Financial Statement Analysis
Disclosure Committee Meeting
CEO Certification
Audit Committee
10Q Filed; ER
Published
Distribution of Drafts Week 3-4
Reconciliations
Internal Controls Review (ICFR)
Consolidations
Integrated XBRL
Filing
Shortened Cycle and Cost
Savings
Software Solutions For Those Who Seek To….
Institutionalize financial best practices
Centralize close tasklist, updated real-time as work is performed
Self document controls during execution
Identify, escalate, and track issues through resolution
Achieve fully documented, paper-less close process from record to reporting
Angela Stephens,
Senior Vice President – Controller
Overview
• #1 Flavored CSD company in U.S.
• One of the top 3 North America LRBs
• Key brands include: DP, 7UP, A&W,
Sunkist, Canada Dry, Crush, Hawaiian
Punch, Mott’s and Snapple
• Revenues of $5.9 billion; Market Cap
$8.4 billion – FY 2011
• Approximately 19,000 employees in 150
principal locations
• Centralization began in 2004
• Current portfolio includes: Master Data, Customer Trade Accounting,
A/P, A/R, Fixed Assets and Cash Accounting
• Genpact is 3rd party outsourcer - located in Delhi and Hyderabad, India
• 335 Total Employees (208 DPSG / 127 Genpact)
• Main locations are Delhi, India and Plano, Texas
DPSG
Shared
Services
Center
DPS last mile of finance challenges…
Need to eliminate manual processes that are risk prone and time
consuming
– AssureNet will:
Automate the retrieval of account balances and activity, speeding the closing
processes (today it is all done manually in Excel spreadsheets)
Improve data accuracy – not only will the reconciliation process be faster, the
accuracy and validity of our current process in Excel is time consuming
Allow us to transfer time spent on transactional work to more analytical procedures
Need to improve data access
– With AssureNet:
Data is stored centrally, allowing us to access it quickly and securely – Now it is
maintained in our shared drives maintained by multiple business units
Internal and external auditors can be given access to all or select accounts
eliminating time-consuming “hand-offs” occurring now
Improved Standardization
– With AssureNet:
Allows multiple ledgers to perform reconciliations consistently – some reconciliations
are standardized but opportunities remain
Templates can be customized to meet DPS needs from variance reporting to risk
analysis
DPS last mile of finance challenges…
Need for enhanced workflow/task management
– With AssureNet:
We will be able to have visibility to the status of reconciliations throughout the process
- increasing accountability throughout the organization eases compliance monitoring
and creation of report statistics for KPIs.
Automated routing/notification of completed reconciliations to the reviewer
Roles and responsibilities around reconciliations will no longer need to be manually
documented in Excel matrices – a well-defined user data base is maintained.
Improved Compliance and Risk Management
– With AssureNet:
Highlighting risks and opportunities within the balance sheet will no longer be reliant
on manual processes – and can be standardized.
The certification capability will allow us to define rules within accounts prior to sign-off.
Dynamic risk ratings will allow us to continuously monitor our accounts as the balance
and other drivers change – balancing workloads where the risk is, versus lower risk
accounts
Speakers: • Margaret Kelly – Trintech
• Gavin Backos – KPMG
• Angela Stephens – Dr. Pepper Snapple Group
Questions
Questions from the
audience?