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By Margaret Harrist | July 2020
Often, accountants spend an inordinate amount of their time chasing down, verifying, and reconciling data from across their companies. Many in accounting are still doing their jobs using on-premises finance systems that were highly customized to align with the business needs a decade or more ago. To accommodate the growing demands of a more data-driven business environment, accountants have become accustomed to using a range of spreadsheets to compile and analyze data from these legacy systems.
But as more and more businesses move to the cloud to update and automate finance processes, accountants are being freed from those data-chasing, spreadsheet-laden tasks.
The cloud revolution in enterprise computing has sparked an evolution in the day-to-day work of corporate accountants. For example, Rajeswari Ramanathan, director of global intercompany and compensation and benefits accounting at Oracle, says that the way her group spends their time has changed dramatically since they started using Oracle Cloud ERP (which has again been named a Leader in Gartner Magic Quadrant for Cloud Core Financial Management Suites for Midsize, Large, and Global Enterprises). “As accountants, we love numbers,” says Ramanathan, who leads a team of more than 50 accountants. “But before we moved to the cloud, a lot of our time was spent on gathering, consolidating, and reconciling data, leaving us not much time for numbers and analytics.”
Here are three specific examples of how working in the cloud has changed work for her group:
Expense accruals. When Oracle has a purchase order in the Oracle iProcurement system and has received a service from a vendor, but has no invoice to match against that purchase order, there is a risk the company could be under-reporting expenses and showing an incorrect liability in its balance sheet. In the past, the accounting team had to run multiple reports, do manual reconciliations, and account for the mismatches individually in each company ledger.
Today, the accounting team uses Oracle Cloud ERP to run a global open PO report (leveraging the business intelligence capabilities of Oracle Analytics Cloud) and then runs one single journal using the system’s multiledger, multicurrency journal template. Before moving to the cloud, the accounting team would have to prepare separate journals for 150 different operating entities—a big project that required the time of several team members.
“A multiledger, multicurrency template allows us to do it once regardless of currency,” Ramanathan says. “Now, the journals are handled by a limited set of team members, and the numbers are processed accurately and in a timely manner.”
“I’m not just looking at numbers, but the meaning behind the numbers.”
Expense allocations. Accounting has to divvy up a range of costs among departments or lines of business. For example, the team must allocate office space rental costs among departments at a company site based on space occupied and benefits expenses by each department’s head count. It’s a complex endeavor in a multinational company with hundreds of locations and tens of thousands of employees.
Previously, the accounting team had to use a formula for these allocations at the country (entity) level, which meant some 11,400 allocation formulas. But now that this process is on Oracle Cloud ERP and the company has moved to a global chart of accounts, the allocations are standardized and reduced by 98%, Ramanathan says.
“We can now pull account analysis and subledger reports from Oracle Cloud ERP regionally or globally—and easily do global reconciliations for a category (such as accounts payable) for all countries using Oracle Cloud EPM,” she says. “That enables us to see common issues and potential risks in a category across a region or globally.”
Data visualization. In addition to not spending time tracking down and validating such information, one of Ramanathan’s favorite things about using the new cloud-based system is the ability to visually explore data using Oracle Analytics Cloud.
“All we have to do is upload our data, and we get a range of visual analytics in flow charts, bar diagrams, or whatever way we define,” she says. “It can handle millions of rows of data and provide the analytics in just a few seconds.”
That ability to quickly connect the dots—which behind the scenes is being enhanced by a growing range of machine-learning capabilities integrated into the finance system—enables Ramanathan and her team to provide a level of insight to Oracle executives that has never been possible before.
“What excites me is that I’m now able to look into data and provide meaningful interpretations,” she says. “I’m not just looking at numbers, but the meaning behind the numbers.”
Margaret Harrist is director of content strategy and implementation at Oracle, where she focuses on digital disruption, enterprise resource planning, supply chain, Internet of Things, and SaaS. Follow her at @mharrist.