Fast close enablementFinancial reconciliation with business insights Advisory, India Analytics

2 | Companies Act

Finance/controllership within organizations is increasingly prompting towards the automation of repeatable activities for periodic book closing. The focus of these groups has shifted to analysis of financial data to provide actionable business insights in key revenue and expense provisioning activities. The goal of fast close enablement solution is to provide an efficient mechanism for faster book closing.

The book closing process often poses barriers to timely completion for the following reasons:

► The activity is manual, time consuming and susceptible to accuracy-related issues.

► The provisioning process is complex due to:

► Lack of leading practices and

► Paucity of right tools and technology.

► Typically, book closing processes involve analysis and collation of data through multiple spreadsheets.

► In the backdrop of new audit demands and additional regulatory reporting requirements, closing takes more than a week.

Need for fast close enablement

Are periodic book closing processes

taking too much time?

Do you know the exact date when

you can publish the operating results of

your company?

Does your organization have

systems and procedures in place for reproducibility of results for Audit

purposes?

Is the month / quarter / year

end book closing activity dependent

on certain individual employees?

Fast close enablement

Fast close enablement is a framework of business rules created to automate period close activities using workflow technologies with following benefits:

Reduction in turnaround time Fast close enablement improves operational efficiency by providingthe following benefits:

► ► Cycle time reduction in periodic book closure activities

► Automation of data extraction and transformation

► System dependent, rather than a people dependent process

Better business insights

Increased accuracy

The solution provides reporting and analytics platform for:

► ► Adhoc and guided analytics

► ► One view of financial data for better decision making

► ► Scenario analysis or what-if analysis

The solution has sophisticated data management features:

► Maker-Checker mechanism with audit trail capabilities

► Historical data storage

► User management

Fast close enablement

Fast Close Enablement requires engagement of cross functional stakeholders :

Identify key business processes: Recommendations on key business processes automation

Control mechanism and data security: Establish maker-checker mechanism for better control and data security

End-to-end automation: Recommendations on providing end-to-end automation

Visibility and reporting: Visualization, reporting and data management

3Companies Act |

Fast close enablement is a framework of business rules created to automate period close activities using workflow technologies with following benefits:

The following chart contains activities for book closing in the IT consulting industry:

► Onsite Claims ►

► ► Offshore Claims

► ► Employee Referral

► ► Final Settlement

► Visa

► Health

► Food Coupon

► Recruitment

► Rentals

► Leasing

► Reinventorization

► Inventory Provision

► Provision for Doubtful debts

► Inventory Provision

Employee Vendor Product Services

Expense Revenue

Provision ClassificationIllustrative

4 | Companies Act

Ilustrative insights

Provision for Doubtful Debts (PDD): PDD for organizations, is modelled based on ageing receivables and historical default patterns using the percentage of receivables method. The distribution of PDD across geographies provides vital information about which areas to focus on for better financial management. Re-inventorization: This refers to trend analysis of “reversal of cost” entries for undelivered/returned products or services.The trending report is useful to identify the trend of re-inventorisation levels across months.

Use Case: Fast close enablement

Business need : Controllership groups within organizations face several challenges in their periodic book closing activities. The activities are time consuming, people intensive, and need high levels of senior management scrutiny. In effect the processes are error prone and inefficient. Additionally, lack of systemic capabilities and leading practices make it cumbersome to analyse and estimate provisional amounts that form the basis for their financial planning & book closing activities.Proposed Solution: The Analytics team worked closely with Finance/Controllership groups in order to

Value Proposition:

• Identify opportunities for enablement, Ex.- Expenses and revenue provisioning.

• Track historical data and enable audit trail and analytics capabilities.

• Suggest and enable tool set like .NET, SQL server, TIBCO Spotfire for the fast close enablement application and user interface.

• Technology enabled platform to automate financial book closing.

• Significant cycle time reduction and process efficiency resulting in saving critical time and providing audit trail capabilities.

• Enable management to make informed decisions using the reports with visualisation.

• Opportunity to standardize processes & leverage solution across subsidiaries.

Business Insights

5Companies Act |

Fast close enablement roadmap: A blueprint of typical phases in a fast close enablement engagement.

► Understand business requirements for provisioning and data analytics

► Developement of scripts as per the Business Requirements Document after the sign-off

► Unit test the scripts for desired results

► Perform a parallel run to compare the output with current practices and get it validated by business users

► Migrate the scripts to production and user interface integration

► Support the client during the analytics enablement

Requirements Build Testing Validation UI IntegrationSupport Transition

Fast close enablement benefits

► ► Cycle time reduced from 4 days to 6 hours

► ► Audit trial with maker-checker mechanism for any historic reporting needs

► ► Data integrity and security since the business users do not work on data extracts

► Scenario analysis. For example, exchange rate fluctuations in provisioning

► ► Data Analytics - trending, identification of data swings and granular data views

Why EY: our key differentiators

Our understanding and commitment

• The approach and operational model is geared towards achieving an accelerated value capture, ROI and productivity

• EY’s commitment to client engagements will have the highest priority from the beginning — a pre-built onboarding plan + comprehensive workplan + a problem solving approach

Our approach and resource model

• A lean, high performing, yet scalable team

• “One” unified EY team: EY’s resources will be on the ground working alongside clients

• Sufficient subject matter knowledge in business, technology and analytics

Knowledge capital and tools

• Process specific data dictionaries, data models, visual analysis and reporting templates

• Proven analytics scripts and rule based engines

Range of analytics capabilities

• EY’s Data Analytics team has wide ranging analytics capabilities in descriptive and fraud analytics

• EY’s deep insights into process/performance improvements in business analytics

6 | Companies Act

NOTES

7Companies Act |

Our officesAhmedabad2nd floor, Shivalik IshaanNear. C.N VidhyalayaAmbawadiAhmedabad-380015Tel: +91 79 6608 3800Fax: +91 79 6608 3900

Bengaluru12th & 13th floor“U B City” Canberra BlockNo.24, Vittal Mallya RoadBengaluru-560 001Tel: +91 80 4027 5000+91 80 6727 5000Fax: +91 80 2210 6000 (12th floor)Fax: +91 80 2224 0695 (13th floor)

1st Floor, Prestige EmeraldNo.4, Madras Bank RoadLavelle Road JunctionBengaluru-560 001 IndiaTel: +91 80 6727 5000Fax: +91 80 2222 4112

Chandigarh1st FloorSCO: 166-167Sector 9-C, Madhya MargChandigarh-160 009Tel: +91 17 2 331 7800Fax: +91 172 331 7888

ChennaiTidel Park6th & 7th FloorA Block (Module 601,701-702)No.4, Rajiv Gandhi SalaiTaramaniChennai-600113Tel: +91 44 6654 8100Fax: +91 44 2254 0120

HyderabadOval Office18, iLabs CentreHitech City, MadhapurHyderabad - 500081Tel: +91 40 6736 2000Fax: +91 40 6736 2200

Kochi9th Floor “ABAD Nucleus”NH-49, Maradu POKochi - 682 304Tel: +91 484 304 4000Fax: +91 484 270 5393

Kolkata22, Camac Street3rd Floor, Block C”Kolkata-700 016Tel: +91 33 6615 3400Fax: +91 33 2281 7750

Mumbai14th Floor, The Ruby29 Senapati Bapat MargDadar (west)Mumbai-400 028, IndiaTel: +91 22 6192 0000Fax: +91 22 6192 1000

5th Floor Block B-2Nirlon Knowledge ParkOff. Western Express HighwayGoregaon (E)Mumbai-400 063, IndiaTel: +91 22 6192 0000Fax: +91 22 6192 3000

NCRGolf View CorporateTower – BNear DLF Golf CourseSector 42Gurgaon–122 002Tel: +91 124 464 4000Fax: +91 124 464 4050

6th floor, HT House18-20 Kasturba Gandhi MargNew Delhi-110 001Tel: +91 11 4363 3000Fax: +91 11 4363 3200

4th & 5th Floor, Plot No 2BTower 2, Sector 126NOIDA-201 304Gautam Budh Nagar, U.P. IndiaTel: +91 120 671 7000Fax: +91 120 671 7171

PuneC—401, 4th floorPanchshil Tech ParkYerwada (Near Don Bosco School)Pune-411 006Tel: +91 20 6603 6000Fax: +91 20 6601 5900

For more information about how our team can help you and your business, please contact:

N Balaji n.balaji@in.ey.com, +91 44 6654 6835

Jasjeet Singh jasjeet.singh@in.ey.com, +91 124 464 4078

Kunal Mhaske kunal.mhaske@in.ey.com, +91 22 619 20256

Upendra Sai upendra.sai@in.ey.com, +91 44 6654 8642

Jayendran GS jayendran.gs@in.ey.com, +91 44 6654 8643

Aravind Srinivas aravind.srinivas@in.ey.com, +91 80 6727 5157

Contacts

About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

Ernst & Young LLP is one of the Indian client serving member firms of EYGM Limited. For more information about our organization, please visit www.ey.com/in.

Ernst & Young LLP is a Limited Liability Partnership, registered under the Limited Liability Partnership Act, 2008 in India, having its registered office at 22 Camac Street, 3rd Floor, Block C, Kolkata - 700016

© 2014 Ernst & Young LLP. Published in India. All Rights Reserved.

EYIN1411-121

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither Ernst & Young LLP nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.

Ernst & Young LLPEY | Assurance | Tax | Transactions | Advisory

EY refers to the global organization, and/or one or more of the independent member firms of Ernst & Young Global Limited