1、IBM Institute for Business Value|Benchmark InsightsModernize record-to-reportHow AI and automation are changing the game2From improving the efficiency of finance processes to creating smart functions with intelligent workflows,we help transform finance organizations.Intelligent workflows,with capabi

2、lities of finding,connecting,and analyzing data,can uncover deep insights to strengthen decision-making.Our financial consultants partner with clients to advise and manage end-to-end processes.To learn more,please visit IBM can help1For organizations processing more than 1.5 million journal entries

3、annually,the implementation of AI is the top predictor of monthly close cycle time.For organizations processing fewer journal entries,the top predictor of cycle time is the maturity of information availability,suggesting struggles with data complexity.Organizations that have optimized robotic proces

4、s automation in general accounting have a 25%faster cycle time for the monthly close.They also experience a 38%lower cost per journal entry than peers who have lower levels of automation.Organizations infusing AI into record-to-report generate 66%faster cycle time to process journal entries.However,

5、only 19%of organizations report rolling out or fully implementing AI.Fewer than 10%of activities are dedicated to analysis and actionareas crucial to supporting improved business decisions.1Key takeaways23IntroductionSucceeding in economic uncertainty doesnt happen on its own.It requires purposeful

6、agility,rapid innovation,and the right kinds of platforms and ecosystems.How to capitalize on these opportunities and lead decision-making?Look to finance as your key function.Yet,nearly half of finances time is still spent on transactional activities.In fact,fewer than 10%of activities are dedicate

7、d to analysis and actionareas crucial to supporting improved business decisions.1 To provide strategic,financial,and operational feedback on the performance of the organization,2 finance needs to transform record-to-report,the end-to-end process of recording,closing,consolidating,and reporting on fi

8、nancial data at the period end.3Typically,the record-to-report process encounters a number of key challenges (see page 4).Often,these challenges pile up,resulting in complexity,time-consuming activities,errors,and inaccurate financial results.An ideal record-to-report process will digitally transfor

9、m finance operations with virtual and continuous accounting to better meet compliance requirements,improve efficiency,and enable business leaders to make agile financial decisions.The financial reports produced by the record-to-report process help CxOs with strategic planning in terms of performance

10、 goals and actions required.An increase in efficiency in record-to-report can directly reduce process costs since on average record-to-report is approximately 20%of all finance function FTEs.4 Data is the heart of record-to-report.4Key challenges The IBM Institute for Business Value(IBV)Performance

11、Data and Benchmarking Program performed a statistical analysis of data collected in 2021 and 2022 from more than 500 finance managers globally(see“Study approach and Journal entries:Inefficiency and variability arise with existing activities.Journal entries are created with many repetitive tasks and

12、 manual follow-ups are required for much of the input data.Disparate enterprise systems coupled with lack of data access and process digitization often create a lack of transaction visibility.As a result,manual interventions in the process compromise the audit trail.The inability to review and verif

13、y all in-process journal entries leads to delayed close.Decisions cannot be made in real time.Limited business insights are available or delayed often,rendering them useless.Reconciliations:Siloed disparate processes involve manual and repetitive work.Few insights are available to facilitate meaning

14、ful forecasts or real-time decisions.A lack of transparency and traceability exists with no end-to-end visibility of siloed data.Finance staff encounter a poor user experience with no unified view of end-to-end operations that would allow them to work seamlessly without hindrances.methodology”on pag

15、e 20).The analysis correlates the adoption of exponential technologies with outperformance in a variety of record-to-report performance measures.5Chapter 1Data management sets the foundation for record-to-reportWe determined that top performing organizations in the cycle time to perform the monthly

16、close have three things in common:maturity of information availability,the use of robotic process automation(RPA),and implementation of AI.When we segmented organizations based on the volume of journal entries processed annually,we saw differences in the relative importance of those three factors(se

17、e Figure 1).For organizations that process fewer than 1.5 million journal entries annually,the top predictor of cycle time was the maturity of information availability.For organizations processing more than 1.5 million journal entries annually,the top predictor of cycle time was the implementation o

18、f AI.FIGURE 1Information availability is critical for monthly close.Maturity of information availability26%Use of RPA24%Implementation of AI19%Implementation of AI28%Maturity of information availability22%Use of RPA19%Key factors in estimating the speed for the monthly closeSource:IBV Data and Bench

19、marking and Performance.2022.Organizations processing more than 1.5m journals annuallyOrganizations processing fewer than 1.5m journals annually6Data is the heart of record-to-report.The emphasis on information availability can be explained by struggles with:Gathering and processing structured and u

20、nstructured data from different sources Collecting and consolidating a large amount of data Validating and reconciling data.For those organizations processing fewer than 1.5 million journal entries annually,reduction of this datas structural complexity becomes a precondition.This requires an enterpr

21、ise-wide data governance framework:data standards and rules to collect,use,and share data simplify the environment.A comprehensive and consistent enterprise archi-tecture is important to the scaling and compatibility of workflows.Cloud computing can help with the control and sharing of data.Without

22、FIGURE 2Cloud computing assists with data availability and analysis.28%Other respondents45%Organizations that are leading/optimizing data availabilityAdoption of cloudthis cloud environment,finance organizations will struggle to develop and maintain not only financial and operational data,but the in

23、tegration of the two.In addition,cloud computing allows access to exponential technologies,such as automation and AI,and supports the seamless flow of data,enabling finance organiza-tions to use it in new ways.In fact,61%more organizations that are leading or optimizing in data availability and anal

24、ysis capabilities have adopted cloud technology(as opposed to on-prem or hosted solutions)for their general accounting and reporting processes compared to other respondents with lower maturity(see Figure 2).With only 35%of respondents reporting adoption of cloud technology for their general accounti

25、ng and reporting processes,cloud computing presents an untapped opportunity for many finance organizations.Source:IBV Data and Benchmarking and Performance.2022.Q.What best describes your current software delivery method for the general accounting and reporting processes?7Case studyGenerali Hong Kon

26、g:Creating the foundation for finance transformation5Generali Hong Kong is a branch of the Italy-based financial firm Assicurazioni Generali,providing life,commercial,health,and other insurance products for private and commercial clients.As change sweeps the financial services industry,Generali Hong

27、 Kong has undertaken its own transformation journey.For the finance function,its goals were to drive real-time data flow with automated control;shift the focus from reporting and reconciliation to analysis;and reinforce robustness in reporting and business insights.To address the challenge,Generali

28、Hong Kong adopted a cloud-hosted ERP solution,which allowed the organization to conduct instant data mining and access intelligent robotic process automation tools.As a result,Generali Hong Kong now has a single,trusted source of truth for its financial data.The new automation has eased critical fin

29、ancial processes,such as vendor payment and bank reconciliation.It has also freed up staff time from administrative activities to focus on analytics-based roles,enhancing insight capabilities.789Chapter 2 Automation speeds the record-to-report processRPA allows finance organizations to automate manu

30、al repetitive rules-based activities.This technology does what finance staff would normally dobut better,faster,and cheaper.For example,chatbots provide instant connection and a single source of truth for journal entries.An automated scheduler checks for data input and availability and sends alerts.

31、In reconciliations,semi-autonomous processing and self-service can be established with auto certification,auto match,and auto comment features.Touchless automation can enable a 60-75%reduction in journal cycle time.6 Yet,only 10%of respondents reported optimizing RPA for their general accounting pro

32、cess.But 75%more top performers have optimized RPA for their general accounting process compared to other respondents.7Organizations that have optimized RPA in the general accounting process have a 25%faster cycle time for the monthly close at the business entity level compared to organizations that

33、 have not adopted RPA at all(see Figure 3).FIGURE 3Leveraging RPA in general accounting yields cycle time improvements.3 days 4 days vsOptimized RPA No RPA Source:IBV Performance Data and Benchmarking.2022.Q.Which best describes your use of Robotic Process Automation(RPA)technology to automate porti

34、ons of the process“perform general accounting”?25%faster monthly close cycle time using RPA10Organizations that have automated more than 95%of their journal entries have 38%lower cost per journal entry compared to organizations that have automated up to 95%of their journal entries(see Figure 4).FIGU

35、RE 4 Automation of journal entries lowers costs.Source:IBV Performance Data and Benchmarking.2022;Q.Of your business entitys total annual number of journal entries,what percentage was automated(system generated)?$1.07 for organization with more than 95%automationCost per journal entry$1.73 for organ

36、izations with up to 95%automation11Case studiesMetals and mining corporation:Increasing efficiency while enhancing controls8This company had disparate systems which created a siloed record-to-report process.This scenario resulted in suboptimal outcomes for both the company and its customers.To resol

37、ve this situation,the company engaged a partner to benchmark,standardize,centralize,and optimize various processes in the record-to-report process.Automated processes enabled finance teams to focus on performance insights which improved the profile of the finance function within the business.The wor

38、k yielded a two-day decrease in the close cycle,30%headcount reduction,and$25 million in cost savings.Multinational building materials company:Automating sales and inventory reconciliation9The company was missing its daily deadline for reconciliation.Robotic automation was able to bring higher effic

39、iency.Automated daily reconciliation effort to improve inventory planning Robot pulls from multiple point systems and performs reconciliation even in off hours Analysts capacity shifted to handle more complex tasks and exceptions.The company was able to achieve a 39%reduction in cycle time and a 75%

40、decrease in manual work effort.111213Chapter 3AI enables record-to-report insightsInfusing AI into record-to-report streamlines the process and enhances decision-making.For journal entries,an AI-powered workflow can provide qualitative reviews using historical behavior and rules that enforce organiz

41、ational policies and provide early insights into performance and business impact.Greater than 99%first pass accuracy can be generated through machine learning.10In reconciliations,machine learning-based actionable insights can be generated based on reconciliation anomalies and transaction anomalies.

42、In addition,an AI-powered workflow can create risk insights highlighting transactional anomalies period over period.However,only 19%of respondents reported rolling out or fully implementing AI for finance operations cost optimization.Twice as many top performers in the general accounting and reporti

43、ng processes have fully integrated cognitive capabilities across their finance organizations for finance operations cost optimizations.1466%more organizations that have fully implemented AI for finance operations cost optimization and are mature in their data availability and analysis capabilities(s

44、coring a 4 or 5 on a 5-point maturity scale)are top performers in record-to-report compared to other respondents.FIGURE 5Leveraging AI yields cycle time improvements.Source:IBV Performance Data and Benchmarking.2022;Q.Of your business entitys total annual number of journal entries,what percentage wa

45、s automated(system generated)?3 hours per journal entry for all other organizations1 hour per journal entry for organizations with fully implemented AI and mature in data availability/analysis capabilitiesAn example of their superior performance is the cycle time to process journal entries,in which

46、these organizations are 66%faster(see Figure 5).Hours per journal entry3x faster 15Case studiesCanadian multinational financial services company:Enhancing reconciliations11The current process was supported by the banks in-house shared services team and a third-party service provider.However,the exte

47、rnal provider was unable to support business process service delivery due to a nationwide lockdown in India,which impacted critical finance processes during quarter close.A proof-of-value project demonstrated that an intelligent workflow solution could drive significant efficiency and reduce risk po

48、tentially across the more than 1,100 reconciliations undertaken by the bank.Business outcomes included operating expense savings,transfor-mation,and resiliency.The company achieved a 50%reduction in efforts involved with reconciliation,35%reduction of cost after accounting for platform implementatio

49、n,and reduced audit cost and efforts.Reduced risk and increased compliance to guidelines were generated due to reduction in manual intervention.Educational products and services company:Addressing inefficient record-to-report process12This company performed close to 520 intercompany reconciliations

50、every month,using a manual process that was inefficient in quality,control,and speed of execution.By implementing robotic process automation,the company improved productivity by 31%for the inter-company end-to-end process.As well,intercompany reconciliations were prepared five times faster.Insuffici

51、ent time for analysis prior to earnings announcements also posed a challenge to the close process.A cognitive close optimizer solution provided insights to outstanding items and workload distribution during the close process.Improved work allocation resulted in increased practitioner productivity an

52、d a 50%reduction in close cycle time.1516PerspectiveDo you need to modernize your record-to-report process?Key questions to ask:Are you comfortable with the current close cycle time?Are standard processes and procedures followed by all business units and/or geographies?Do you have a high level of co

53、nfidence in the systems and controls that are in place?Are your teams spending too much time gathering and validating data?Do you have visibility to the status of all outstanding issues during the close cycle?Is the workload of your teams significantly skewed toward month/quarter end,resulting in su

54、boptimal utilization?Have you been able to capitalize on exponential technologies to drive better performance insights?17Getting startedWith proper data management,the combination of automation and AI is powerful for record-to-report.These exponential technologies provide tangible business outcomes,

55、with greater than two days cycle time reduction achievable.A 100%on-time close calendar,70%plus transactional efficiency by reducing actions associated with data processing,and 40%-60%cost reduction are all possible.In terms of effectiveness,organizations could generate a more than 50%improvement on

56、 financial opportunity and risk insights.13As we discussed above,data management is the first area of focus before taking full advantage of automation and AI.The required foundation:standardization of financial data and a data architecture.Once this infrastructure is in place,automation and AI can a

57、ccelerate the record-to-report process.In addition to these exponential technologies,organizations should conduct a holistic review of other contributing factors that enable top performers.An effective service delivery model that enables commonality can make a crucial difference in the process.And t

58、o support the human-technology partnership,finance organizations should closely examine their current skills.18 Action guideLay the groundwork for leveraging exponential technologies in record-to-report using these steps to steer your efforts.01 Use design thinkingUse design thinking to define and a

59、lign around the current experience and pain points in record-to-report.The key stakeholders should be the record-to-report process owner,Chief Accounting Officer,and the Controller.Determine the time and cost involved to perform each task within the lifecycle.Some key areas to look for:Lack of consi

60、stent process Limited and/or lack of visibility in the close process/cycle High volume of open items and/or reconciliations pending Long cycle time to close the books Limited time for analysis before financial reporting.02 Prioritize potential solutionsPrioritize potential solutions including proces

61、s changes,service delivery model,technology implementation,talent/skill capabilities,and data management/governance.03 Develop a business caseDevelop a business case for the solutions,including spend assumptions,maturity assessment of the current record-to-report process,and value that can be genera

62、ted.Potential benefits should include process efficiencies,cost reduction,improved user experience,reduced risks,and increased visibility.19 04 Create an implementation planCreate an implementation plan for the record-to-report transformation,including roadmap,business objectives,milestones,and cost

63、s.Include pilots to rapidly achieve success and demonstrate the value of the solutions.06 Ramp up executionRamp up execution and conduct formal weekly/monthly reviews with business stakeholders to understand roadblocks,critical path,and value realization.Adjust the implementation plan iteratively.05

64、 Continuously monitor performanceContinuously monitor performance after implementation to quantify benefits realized and enable continuous process improvement.20Study approach and methodologyIn partnership with APQC,we surveyed 544 finance managers.The study focused on current general accounting and

65、 reporting practices and technologies,cloud technology,robotic process automation,and AI/cognitive computing capabilities.The scope of the survey was global,including 25 countries across the Americas,Europe,India,China,Asia/Pacific,the Middle East,and Africa.The FIGURE 6Survey demographicsAerospace

66、manufacturing3%Life sciences6%Automotive manufacturing5%Media and entertainment2%Banking11%Mining3%Chemicals and petroleum refining6%Other manufacturing4%Electronics9%Retail5%Fast-moving consumer goods3%Services6%Government7%Telecommunications carriers7%Healthcare providers5%Transportation8%Insuranc

67、e8%Utilities3%Parent organization revenueAfrica and Middle East7%Asia Pacific27%Central and South America9%Europe31%US and Canada26%Regional distributionLess than$100 million 2%$100 million to$500 million 20%$500 million to$1 billion 17%$1 billion to$5 billion 35%$5 billion to$10 billion 10%More tha

68、n$10 billion 16%surveyed enterprises represented 18 industries and included a range of enterprise sizes(see Figure 6).Data cited in this study is self-reported by study respondents.Using multi-layer perceptron neural network models,the relative importance of key factors in estimating the speed for t

69、he monthly close was determined.Those factors are maturity of information availability,the use of robotic process automation,and implementation of AI.Industry distribution21Aerospace manufacturing3%Life sciences6%Automotive manufacturing5%Media and entertainment2%Banking11%Mining3%Chemicals and petr

70、oleum refining6%Other manufacturing4%Electronics9%Retail5%Fast-moving consumer goods3%Services6%Government7%Telecommunications carriers7%Healthcare providers5%Transportation8%Insurance8%Utilities3%Balasubramanian J is a Partner in IBM Consulting and leads the record-to-analyze offerings globally.He

71、is responsible for thought leadership;building strategic partnerships with independent software vendors(ISVs);developing digital offerings,including intelligent workflows;and driving transformation within our record-to-analyze clients.Over more than 20 years,he has worked with IBM clients around pro

72、cess consulting,relationship management,service delivery,and transformation.About the authorsAnnette LaP is the CFO Lead for the IBM Institute for Business Value Performance Data and Benchmarking program.She manages financial management benchmarking and regularly conducts benchmark studies on financ

73、e-related topics.Annette has over 30 years of experience in financial management and consulting.Spencer L is the Global CFO Lead for the IBM Institute for Business Value.He is responsible for market insights,thought leadership development,competitive intelligence,and primary research on the CFO agen

74、da and trends.He is a co-author of the last eight IBM Global CFO Studies.Spencer has over 25 years of experience in financial management and strategy consulting.2122IBM Institute for Business ValueFor two decades,the IBM Institute for Business Value has served as the thought leadership think tank fo

75、r IBM.What inspires us is producing research-backed,technology-informed strategic insights that help leaders make smarter business decisions.From our unique position at the intersection of business,technology,and society,we survey,interview,and engage with thousands of executives,consumers,and exper

76、ts each year,synthesizing their perspectives into credible,inspiring,and actionable insights.To stay connected and informed,sign up to receive IBVs email newsletter at can also follow IBMIBV on Twitter or find us on LinkedIn at https:/ibm.co/ibv-linkedin.About Benchmark InsightsBenchmark Insights fe

77、ature insights for executives on important business and related technology topics.They are based on analysis of performance data and other benchmarking measures.For more information,contact the IBM Institute for Business Value at .23Related ReportsAIs quantified impact on the finance function“AIs qu

78、antified impact on the finance function:Improving process quality,cost,and efficiency.”Benchmarking Insight.IBM Institute for Business Value.November 2022.https:/ibm.co/artificial-intelligence-financeThe CFO Global C-suite Study:Strategic Intelligence“Strategic Intelligence:CFOs as architects of act

79、ion and champions of change.”IBM Institute for Business Value.January 2022.https:/ibm.co/c-suite-study-cfoFinance as the essential business partner“Finance as the essential trusted business partner:To become indispensable,Finance needs next-generation enterprise performance management.”IBM Institute

80、 for Business Value.June 2020.https:/ibm.co/finance-business-partnerThe right partner for a changing worldAt IBM,we collaborate with our clients,bringing together business insight,advanced research,and technology to give them a distinct advantage in todays rapidly changing environment.24Notes and so

81、urces 1 “The CFO Study:Strategic IntelligenceCFOs as architects of action and champions of change.”IBM Institute for Business Value.January 2022.https:/ibm.co/c-suite-study-cfo2 “Gartner Glossary:Record to Report(R2R).”Gartner.Accessed August 15,2022.https:/ “The Record-to-Report Process and Interna

82、l Controls.”APQC.June 10,2021.https:/www.apqc.org/resource-library/resource-listing/record-report-process-and-internal-controls4 IBV Performance Data and Benchmarking.2022.Unpublished information.5 Kaumi,Arsh and Connie Yeung.“Creating the Foundation for Finance Transformation.”IBM.August 17,2020.ht

83、tps:/ us.”Generali Hong Kong.Accessed April 6,2023.https:/.hk/EN_US 6 Based on internal IBM client information.7 Top performers are defined as organizations that score in the overall top quartile percentile ranking with equal weight given to cost,quality and efficiency/quality metrics for general ac

84、counting and reporting.8 Based on internal IBM client information.9 Ibid.10 Ibid.11 Ibid.12 Ibid.13 Ibid.25 Copyright IBM Corporation 2023IBM Corporation New Orchard Road Armonk,NY 10504Produced in the United States of America|April 2023IBM,the IBM logo, and Watson are trademarks of International Bu

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88、IBM shall not be responsible for any loss whatsoever sustained by any organization or person who relies on this publication.The data used in this report may be derived from third-party sources and IBM does not independently verify,validate or audit such data.The results from the use of such data are provided on an“as is”basis and IBM makes no representations or warranties,express or implied.85POJLQ7USEN-00