hyperion 101 fast track your financial close
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Hyperion EPM 101:
Fast Track Your
Financial Close
Presented by: Timothy J. Simkiss, CPA
October 18, 2013
Agenda
BIZTECH SUMMARY
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THE TYPICAL FINANCIAL CLOSE CYCLE
BEST PRACTICES OF WORLD CLASS FINANCE DEPARTMENTS
ORACLE HYPERION EPM TOOLS
1
2
3
4
Q & A SESSION 5
BIZTECH
SUMMARY
PROFESSIONAL SERVICES FIRM
– Professional Services firm focused on Oracle applications and technology
– Oracle Platinum Partner – Highest Level of Certification
– Over 400 successful Oracle implementations over the past 15 years
ORACLE SOLUTIONS
• Oracle Applications
• Oracle Technology
• Business Intelligence
• Hyperion EPM
• Managed Services
INDUSTRIES
• Financial
• Professional
• Business Services
• Communications
• Manufacturing
• Distribution
• Public Sector
• Government
• Healthcare
• Life Sciences
About BizTech
www.biztech.com
SIMKISS
– Former Corporate Controller of a
Multi-million Dollar Organization
– Director of Accounting/FP&A at Several
Companies
– 15 years of Financial & Operational
Accounting Experience
timsimkiss@biztech.com 267-454-3784
TIMOTHY
Hyperion Practice Lead,
CPA
THE TYPICAL
FINANCIAL CLOSE
CYCLE
Financial Close Process
Corporate
Financial
Statements
Corporate
Consolidation
General Ledger System
(Division / Affiliate)
Manual
Entries
Personal
Computing
Software
Enterprise
or Local
Transactional
Systems
Source Data
Reports
Reports
Reports
Typical Budgeting Model
Excel Templates Are Prepped
Templates Instructions Are
Mailed
Templates Submitted to
FPA
Data is Consolidated, Reviewed &
Audited
FPA team Department
Heads
Department
Heads FPA team
Budget is submitted, reviewed & process begins again.
9
1. Complicated Consolidations
• Reviewing, matching, reconciling and accounting for multi-entity, multi-currency intercompany transactions
2. Stringent Regulations
• GAAP (Generally Accepted Accounting Standards)
• IFRS (International Financial Accounting Standards)
3. Heightened Reporting Crunch
• Shrinking Deadlines
• XBRL Requirements
4. Unreliable Spreadsheets
• Error Prone
• Labor Intensive
5. Disconnected Departments
TOP FINANCIAL CLOSE ISSUES
Consolidation At-a-Glance
Collect Data Calculate & Adjust Report
• Gather from multiple & disparate applications
• Store data in a centralized repository
• Generate financial statements, managerial reports, and perform ad hoc analysis
• Apply FASB and IFRS consolidation rules
• Perform currency translation & aggregation
Different Accounting Standards • Most US companies with international subsidiaries are required to account for this activity per the standards of GAAP (Generally Accepted Accounting Standards). • However, International Financial Accounting Standards (IFRS) will be required adoption by US Companies by 2014 unless the SEC decides to delay implementation again (they just might!)
Similarities
Approach(Some
Examples)
IFRS US
GAAP
Revenue
Recognition
Fair Market
(e.g. AR or
Inventory
Valuation)
Detailed
Disclosure
Segment
Reporting
Chart of
Accounts Not
Mandated
Distinction
Between Tax
and External
Reporting
Differences
Approach(Some Examples)
IFRS US
GAAP
Fair Market
Revaluation
Fixed Assets
& Investments
Only
Certain
Fixed
Assets
Extraordinary
Items
None Rare
Consolidation Control 2 Models
Joint Ventures Proportional
OK
Only
Equity
“Development” Capitalized Expensed
Fixed Assets Components Unitary
Leasing Financing Cap vs.
Op
Inventory No LIFO LIFO OK
Impairment 1 Step,
Reversible
2 Step,
No
Reversal
The Reporting Crunch
UNRELIABLE
SPREADSHEETS
z 80%
STILL USE SPREADSHEETS
• Error Prone
• Non-Collaborative
• Maintenance Intensive
• Fragile, Easy to Break
• Little Centralized Control
• Poor Data Integrity
(Audit trails)
• Unmanageable
consolidation
• Lack of Security
Issues that Arise:
DISCONNECTED
PROCESSES
Time – cycles take too long, missed opportunities and obsolete plans
Quality – data integrity, lack of standardization and communication
Flexibility – lack of responsiveness to changes
Cost – many wasted resources, questionable benefits
FP&A
Senior Management
Annual Plan & Forecast
Revenue & Cost Models
M&A
Departmental Plans
Headcount Plans
Treasury Plans
Long-Term Planning
Issues that Arise:
Common Financial Dept vs. World Class Depts.
Processes focused on analysis & value addition
Planning is a communication
Company plan is owned used by all operating mgmt
Continuous planning is responsive to market
Mgmt is empowered & performs optimally
Strategic initiatives funded separately for day-to-day business expenses
World Class Depts. Common Depts.
Time consumed by planning
Future plans, unclear goals and mission are not aligned
“Finance” owns the plan
Process and cycle not linked to the business
Spreadsheets and data stores are fragmented
Metrics are not reflective of strategies Managers mange around plans
No funding in resource plan for strategic initiatives
BEST PRACTICES
OF WORLD CLASS
FINANCE DEPARTMENTS
• World-class finance organizations operate at nearly half the annual cost of typical
companies and have less than half the staff.
• At the same time, these finance organizations are dramatically more effective than
their peers, are better at strategic business support, and drive improved bottom line
results for their companies while reducing close time by 50 percent!
• World-class finance organizations have reduced costs markedly (40%), while the
average finance organization has achieved only a cost19% reduction over the past 8
years. The efficiency gap translates into an annual cost savings of nearly $140
million for a typical Global 1000 company (with $26.38 billion in revenue).
Source: The Hackett Group, 2010 survey
Run models based on key strategies
Set targets
Seed targets to annual operating plan
Start annual process
Update strategic plan with latest forecast
Evaluate resource and capital requirements
Long-term strategic plan
Annual budget / plan
Validate operational feasibility
Evaluate workforce and capital
Monthly / rolling
forecast
Update long-term
strategic plan
World Class Enterprise Planning
Assess and Manage Risk
Validate operational feasibility to financial plan
Update forecast with latest budget and actuals
A world class budget process utilizing the right tools can take a few weeks. However, at many companies, the budget process can take months.
1. Make full use of automation and utilize key metrics to gauge
performance
2. Establish deadlines and use on-line checklists
3. Delegate responsibilities where possible
4. Prepare results and ensure visibility management
5. Eliminate redundancies and paper chasing (outsourcing, shared
services, third party providers)
6. Close sub-ledgers on day one (i.e. a soft close on payables,
receivables and fixed assets)
7. Post recurring journal entries prior to month end (day -1)
8. Reforecast monthly and provide realistic updates
9. Encourage suggestions and improvements to existing processes
10.Document policies and procedures
TOP 10 BEST PRACTICES OF WORLD CLASS FINANCE DEPARTMENTS
Sample KPI’s
Sample Checklist Client name Summary Month End Close Schedule-
Close Activity/Tasks # March-13 Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10
Process/Module Weekly Activities1 Enter AP Invoices daily
2 Create Accounting daily/weekly
3 Validate AP Data
4 Initiate and complete cash transactions
5 Conduct weekly conf call with Controllers
6 Weekly results due by 9am Monday morning
Process/Module Close AP1 Complete All Transactions for the Period Being Closed 4/1/13
2 Run the Payables AutoApproval Process for All Invoices /
Invoice Batches 4/2/13
3 Run Payables Accounting Process and transfer transactions to
GL 4/2/13
4 Prepare Accruals 4/3/13
5 Reconcile AP with GL 4/4/13
6 Close the module (soft and hard close) 4/1/13 4/5/13
Process/Module AR Module1 Reconcile Receipts to Bank Statement Activity for the Period 4/5/13
2 Reconcile the General Ledger Transfer Process 4/6/13
3 Reconcile AR Aging with GL 4/7/13
4 Close the module (soft and hard close) 4/1/2013 4/7/13
Process/Module Fixed Assets1 Run Mass additions program 4/3/13
2 Validate the Gross fixed asset value 4/4/13
3 Run depreciation 4/4/13
4 Validate depreciation 4/4/13
5 Close the module (soft and hard close) 4/1/2013 4/5/13
Subsidiary Name
Daily
Calendar Day
Sample Workflow and Status
Workflow approval process
Key Metrics and Dashboards
Sample Policy
HYPERION EPM
TOOLS
WORLD CLASS FINANCE
DEPARTMENTS & THEIR
TOOLS
ORACLE HYPERION EPM OVERVIEW
FDM/ODI Integration tools
SOURCE
SYSTEMS
DATA
PREPARATION
SERVER
ORACLE EPM
SYSTEMS
Excel
Other ERP
Systems
EBS G/L
Flat files
ETL
Other
Data cleansing &
transformation
Task scheduling
Text & document
archive
Audit review
Data staging
Prepackaged
integration
Data loading
including
supplemental
data and line
item detail
Dimensional
mapping
verification to
corporate COA
Process
management
Hyperion Financial
Management
Hyperion Planning
Hyperion Essbase
Hyperion
Enterprise
Data Marts
GUIDED WORKFLOW USER INTERFACE
EPM Adapters
Hyperion Planning FEATURES
• Strategic Planning
• Forecasting and Modeling & Simulation
• What-if Analysis
• Excel Integration and full Enterprise Collaboration
• Currency conversion feature for multi-currency applications
• Streamlines and improves the Budget process
• Ensures Speed & accuracy
• Finance owned tool
• Align finance and operations
• Accountability
• Visibility to past, current and future business performance
BENEFITS
WORLD CLASS
Planning & Budgeting Applications in the World
#1
Hyperion Essbase FEATURES
• Essbase or "Extended Spread Sheet
dataBASE“, is a 3-D Spreadsheet
• Addresses scalability issues and allows deep dives into data in real time.
• Defines the “by’s” and “where’s” of the company
• Powers the Planning Application as well as its standing alone capabilities
• One Version of the Truth
• Speed-of-thought analysis for thousands of concurrent users
• Scalable to enterprise-level user base
• Premium Performance & Optimized Storage
BENEFITS
Hyperion Financial Management FEATURES
• Multi-Currency Capability
• Multi-Dimensionality Features
• Automates Intercompany Accounting
• Integrates Data from most GL
Systems.
• Excel Integration adapts for user
comfort with spreadsheets
• Web interface, allowing for real time consolidation
• Speed & accuracy
• Finance owned tool
• Align entities and divisions
• Increased Visibility and Accountability
• Out of the box features improve implementation time and ROI
BENEFITS
WORLD CLASS
Financial Reporting Consolidation & Analysis Tool
#1
Financial Close Management
FEATURES
• Workflow solution manage the entire
close process
• Easily illustrates the current status of
the close
• Automates checklists and Account
Reconciliation process
• Highlights which tasks are at risk or
behind schedule
Finance owned
Central dashboard enables:
Process monitoring
Immediate action on errors
Encourages continuous improvement to the close process
BENEFITS
Financial Disclosure Management
FEATURES
• Automates and manages the SEC and other regulatory reporting process
• Ensures data accuracy via embedded regulatory validation rules
• Offers a variety of publishing formats including XBRL, iXBRL, EDGAR HTML and PDF
• Allows multiple users to work together on different report sections
Easy regulatory reporting with data quality assurance
Deep integration with Oracle Hyperion Financial Management, Oracle Hyperion Planning, and Oracle Essbase
Best in class document management
BENEFITS
SUMMARY
AUDIENCE Q&A
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