Speakers Maire Loughran, Author of Close, Consolidate & Report For Dummies Steve Benckenstein, Solution Engineering, IBM

Agenda
Close, Consolidate, Report - Observations & Options Maire Loughran, Author of Close, Consolidate & Report For Dummies Book Insights into the Integrated Financial Close Management Process Steve Benckenstein Solutions Engineer, IBM IBM Cognos FSR An Integrated CCR Solution Steve Benckenstein Solutions Engineer, IBM

Close, Consolidate, Report Observations & Options

Maire Loughran, Author of Close, Consolidate & Report For Dummies Book

Current Problems with CCR Activities

Lack of unified platform for managing the financial close management steps
Finance professionals to labour through hundreds of manual and administrative checks Update and checking hundreds of offline spreadsheets Little or no visibility into the status of steps in closing process Waste of time in performing redundant data checks

Excessive overtime or missed compliance deadlines Close activities prove to be extremely inefficient and costly Inconsistent data from various subsidiaries multiple GL, ERP, and disparate transactional systems

Integrating the CCR process

Why companies invest in integrated CCR solutions

To make efficient and effective business decisions Strengthen the companies ability to provide timely and accurate data for better business decisions Obtain financial information in a controlled, auditable process Ensure data integrity and transparency needed to comply with various regulatory requirements Evaluating and limiting the risks of errors Obtain a single platform in order to enhance and monitor internal controls Automate the production of consolidated financials and external compliance reports

Advances in Disclosure Management Solutions

Automating the creation of internal and external reports
Provides a unified financial governance platform Provides a single version of the truth

Integration to source data GLs, ERP, financial consolidation, OLAP, spreadsheets, etc Integrated XBRL tagging capabilities tagging is embedded in within the external reporting process Workflow and task management dashboard Enhanced Security control access to sensitive data Report Consistency ensure same numbers across separate reports with same data points

Why the need for Integrated CCR Solution

New disclosure requirements make is imperative to streamline and automate manual tasks in the close, consolidate & report process Companies constantly looking at improving the timing and quality of information in reports Follow best practise to embed compliance and controls into each step of the financial close process The need to maintain data integrity in a secure environment Enhance decision making flipping back and forth between data sources is inefficient and ineffective

Ten (Fifteen) Integrated CCR Solution Features

Central secure environment for all CCR activities
Ensures data integrity Enhances controls over the CCR process

Streamline and automate manual closing tasks Audit trail reporting

Automated audit trail from data source through each step until disclosure Intercompany matching and elimination Currency conversion Support for local, regional and global reporting requirements Consolidate diverse ledgers of global units into single currency

Advanced consolidation capabilities

Ten (Fifteen) Integrated CCR Solution Features

Validation and Business Rules

Ensure data is correct and up-to-date in every step of the CCR process Data validation in the last mile of financial reporting Support for currency conversion methods and translations in detail Corporate finance presents figures in any currently while operating entities work in their own currency,
Integrate multiple structured and unstructured data sources. Operational and statistical data (e.g. Headcount)

Currency conversion and translation

Source system integration

Tools to collect non financial data Integrated XBRL tagging capability

Ten (Fifteen) Integrated CCR Solution Features

Automate account reconciliation process
Checking GL, sub-ledgers, operational systems, bank accounts to reconcile financial transactions and report abnormal deltas

Ability to generate outputs in multiple formats Integration with Business Intelligence and Business Analytics tools
Help business leaders make better strategic decisions quicker with more confidence Low total cost of training and ownership

Familiarity and easy of use

Digital storage of reference documentation Jumpstart the CCR process

The Book
Learn To
Distinguish between the closing, consolidating, and financial reporting processes Use integration and automation to ensure data integrity and streamline CCR activities Identify the right CCR solution for your organization

Download eBook at http://www-01.ibm.com/software/analytics/

Insights into the Integrated Financial Close Management Process

Steve Benckenstein, Solutions Engineers, IBM

Addressing the broader enterprise focused role of finance

A broader enterprise focused role requires core Finance efficiency be in place to reliably support business insight and decision making
Demands on Finance Help drive enterprise cost reduction Improve access to and reduce cost of capital Support risk management Provide performance insight and anticipate Partner in strategy and value creation Business Insight Finance Capabilities Needed

Finance Efficiency

Source: IBM Institute for Business Value, The Global CFO Study 2010

The Close, Consolidate, Report Process

CLOSE First Mile Closing Process (Consolidation System)
Data Input & Changes Collect From Subsidiaries

CONSOLIDATE Consolidation Consolidation (Consolidation System)

Create single currencies Minority interest holdings Intercompany eliminations Group closing adj. Management adjustments Allocations Advanced formula calculations Internal controls & compliance testing

REPORT Last Mile Reporting (Consolidation System)

Internal Reporting Financial reporting adjustments Cash flow & other preparation External Reporting Financial statement preparation Publish quarterly, annual reports

First Mile Data quality and control system for collection and reconciliation Consolidation Financial consolidation and systems for processing and preparation Last Mile Leveraging financial data trapped in the close process for reporting Certifying and publishing external documents

Closing Process (Accounting Processes)

Close Sub Ledgers and Systems

Account Reconciliation
Intercompany transactions Prepare journal entries: accruals & adjustments

Financial reporting

Reporting (Reporting Systems)

BI reporting systems

Compliance & Control

Risks of Manual MS-Office Reporting

A closer look at the current reporting process...
Editing, updating, and review of reports done in multiple versions of offline Excel spreadsheets, Word docs and PowerPoint slides MS Office tools not integrated into processes which leads to little visibility or auditability of data within Version control is a nightmare Pieces of data and analysis need to be shared across multiple reports for different audiences
Reviewers

Contributors

Not everyone has access to same files High risk of errors Report data not integrated with source data Requires multiple manual updates of financial or operational data in tables and narrative commentary

Approvers

Document Managers

Requires time-consuming checks to ensure data in up-to-date and to ensure integrity of data throughout the report(s) And little security Primary collaboration tool is unsecured email No central, collaborative solution for preparing reports No controls, audit trail or security over using MS Office & email Confidential information can be easily leaked

Report Consumers

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Financial Close Process has a High Degree of Risk

Performance Reporting and Scorecarding Business Drivers Close, Consolidate, and Report Analyze & Optimize Plan, Forecast, and Control

Risk of Errors
Feature Integration to source data Variables in text Validation Rules Benefit No re-keying of data Consistency across the report Numbers always tie-out

Risk of Late Filing

Feature User prior report as a template for the next period Automatically load new data Benefit No need to re-apply formatting

No need to re-key data

One version of the truth

Feature Security to view or edit each object Workflow controls access throughout the process Benefit Users only see the data they are supposed to see Users only see data when they are allowed to see it Feature

Start reviewing the final report sooner

Benefit To ensure that the right steps are being followed To track who did what, and when they did it

Compliance Checklists

Audit Trail

Access to information is controlled

Increased confidence in the final report

Risk of Insider Leaks

Risk of Non-Compliance

The Last Mile

The Last Mile

Planning Modeling

Budgeting Forecasting

Consolidation Reporting

Monthly Reports, Quarterly Reports, Annual Reports, Internal Reports, Flash Reports

Manual processes dominates The Last Mile Bottlenecks in document creation Collaboration is tedious Copy and paste exercises with Word, Excel and e-mails back and forth Non-existent or minimal internal controls No detailed audit trail of activities and user modifications Many opportunities for data accuracy issues Limited flexibility

Manual Processes Repeated Each Period

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IBM Cognos FSR An Integrated CCR Solution

Steve Benckenstein Solutions Engineer, IBM

IBM Cognos FSR What it is

Key features:
Leverage the formatting capabilities of MS-Word & Excel as well as the calculation features of MS-Excel
Dynamically driven from a central database

Controlled access with full audit trail

Workflow for report reviews and approvals Integrated XBRL tagging is part of the process, not an after-thought Automated Roll-Forward of XBRL Tags for subsequent periods

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True Integrated Financial Governance

SOURCE SYSTEMS
REAL TIME
Excel Reports

Output Requirements

REAL TIME
TRICKLE
COGNOS

Close Reports

TM1 Explorer

EDGAR-ready

Financial Reports

Go Office

DIRECT TO FSR

IBM Cognos Controller IBM Cognos Controller

Built-in Financial Intelligence Deep Consolidation Functions Multi Jurisdictional GAAP Reporting

Familiar Web & Excel User Interface

Consolidation Workflow 260+ Working Reports Out of the Box

IBM Cognos Controller

Extend with:

Application Configuration Approach Financed Owned Rapid Time to Value

IBM Cognos TM1 IBM Cognos BI Performance Blueprints

Cognos Controller
Finance Consolidation Intelligence
PURPOSE BUILT directly into the solution and user interface Allows organizations to leverage CONSOLIDATION BEST PRACTICES Secure auditable closing

Single Application Approach - Adaptability and Flexibility

RICH APPLICATION FUNCTIONALITY out of the box Multiple Roll Ups (hierarchies) Data from disparate sources ADAPTABLE to changing business conditions and external requirements OWNED BY FINANCE low dependence on external consultants or IT = low total cost of ownership

Reporting, analysis, budgeting and information delivery

ON DEMAND REPORTS for understanding and certifying company consolidations BUILT-IN, standard financial and management performance reporting LEVERAGE Cognos BI & Planning tools for analysis, budgeting and broader reporting

Low Implementation Risk

FINANCE DRIVEN solution for rapid implementation NO CODING system design = low risk approach to system success

Sharing Information Across the Organization

Performance Reporting and Scorecarding Business Drivers Close, Consolidate, and Report Analyze & Optimize Plan, Forecast, and Control

Press Releases Annual Report Prospectus News Wire Releases

Board Books Flash Reporting Investor Relations Internal Reporting Management Reporting

Notes & Exhibits to Statutory Filings Proxy Statements Legal Statutory Reporting SEC Filings (10K, 10Q, etc.) CSR Reports 23 Regulatory Reporting

Reporting to Federal, State and local agencies

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Integrated Financial Governance Solution

Extending the Value of FSR Beyond External Reporting

Internal Reporting, including: Flash Reports Board Books Budget Books Other Internal Reporting Packages CEO/CFO Certification Process GAAP to IFRS Conversion Corporate Social Responsibility (CSR) Reporting Enterprise Risk Management Reconciliation Management

Automate Manual Internal Reporting with Cognos FSR

A unified governance platform for automating internal management reporting processes
Integrate with any data source to ensure a single source of the truth
Document Managers

Use web templates to automate data collection from anywhere in the world Variables in text provide real time data updates within reports
Reviewers

IBM Cognos FSR

Contributors

Enhance controls and security with audit trail reporting and embedded approval checklists Workflow and task management tools provide greater visibility into every step of the process

Report Consumers

Approvers

Create/update content once and automatically update that content across multiple reports Multi-author environment allows for collaboration in creating content-rich reports

Consolidations ERP Excel OLAP Web

User friendly and familiar interface of MS Office Business rules and embedded validation greatly reduce risk of errors Generate reports in multiple formats including PDF & Powerpoint, MS Word and more

Data Warehouse

Questions