Finance and Accounting

Optimising record-to-report process: Strategies for efficiency and excellence

The record-to-report (R2R) process ensures the accuracy and integrity of the company’s financial data, including financial transactions, accounts reconciliation, and reporting. It is essential for financial compliance, transparency, and informed decision-making.

Insights into financial data help businesses achieve greater performance, profits, and competitive advantage. However, it is necessary to go beyond just implementing an R2R strategy. One needs to optimise it to attain maximum efficiency and excellence.

This article discusses the common challenges and record-to-report best practices for optimisation.

Common R2R challenges

In large organisations with complex intercompany accounting workflows, manual R2R can run into several issues while translating the data into insights and financial reports. Some of the common challenges are:

Inefficient master data management 

Inaccurate and incomplete data, and inefficient workflows can cause problems within the master data you need for reporting, planning, and decision-making. Without a clear and formal workflow for data collection, organisation, and analysis, the finance and accounting process can be riddled with errors that can cause delays in decision-making with a higher risk exposure.

General ledger issues

General ledger closing, validation, and reconciliation are accurate only if the underlying data has integrity. Once your finance team begins reconciling and verifying the general ledger, errors in extracting data from several systems and departments may become evident. When the timeline for the tax return is looming ahead, this can cause unnecessary stress, frustration, and unwanted expenses. One may need to put the analysis on hold to investigate the journal entries.

Complex reporting and compliance

Organisations must meet the expectations of internal and external stakeholders and regulatory bodies. To do so, they must manage financial compliance, which can be difficult for large businesses with complex accounting systems.

With a robust, fast, and accurate data management solution, companies can achieve compliance, lower risk, and elevate performance and performance.

Why is R2R process optimisation important?

A robust and optimised R2R process within finance and accounting ensures the accuracy of data and reports and compliance with regulations. It also lays the foundation for better decision-making and strong and sustainable growth.

Real-time analytics help you leverage market opportunities before your competitors can catch up. Trusted data integrity fuels strategic planning and forecasting and sets the stage for scaling the volumes.

By investing in technology that improves the efficiency of the R2R process, organisations can manage risk, stay ahead of the competition, and comply with the necessary regulations.

Ways to optimise the R2R process

While the steps may vary in every organisation, here is a list of record-to-report best practices that one must consider:

Invest in automation

An automated record-to-report system can handle repetitive tasks such as calculations and data entry, reducing the risk of manual errors. Automation also integrates different financial systems for a seamless flow of data. It increases efficiency with faster, real-time reporting and lower operational costs.

Simplify and standardise processes and formats

Simplify and standardise the accounting processes and data formats across the organisation, including subsidiaries. Having consistent terminology and format within the F&A process will simplify reporting and bring greater transparency and accuracy. It will also reduce discrepancies in the financial reports, making them easier to interpret.

Simply the month-end closing

Monthly closing can be a complex process, and simplifying it includes creating clear timelines and checklists, and automating repetitive tasks. It helps organisations report financial data promptly for timely decision-making.

Establish intercompany accounting

Businesses that operate with multiple subsidiaries must establish clear intercompany accounting procedures to ensure accuracy and efficiency in information sharing and reconciliation. This increases visibility and gives greater control over financial transactions, thus reducing misreporting.

Real-time reconciliation of accounts

Regular account reconciliation is crucial in complex, multi-faceted businesses. This process verifies the financial data to identify and correct discrepancies and missing information to ensure accuracy and compliance. It maintains the integrity of economic data and minimises the risk of fraud.

Tax management

To stay on top of tax compliances, one must know the changes in laws, ensure proper taxation, and implement strategies to minimise liabilities. It helps organisations take advantage of incentives to optimise their financial position. This improves financial operations, enhances transparency, reduces errors, and shows the stability of a business.

Centralise governance standards and monitor data quality 

Create centralised protocols to record, report, and distribute financial data covering system access, account procedures, reporting, master data dictionaries, etc. Emphasise completeness, consistency, timeliness, and accuracy of financial data to prevent errors from accumulating downstream.

How can Infosys BPM help with record-to-report strategies?

The F&A record-to-report services ensure the accuracy and integrity of financial data by optimising the processes and integrating systems. This ensures compliance of statements with fiscal and statutory requirements.

Read more about record-to-report automation at Infosys BPM.