Data management stands out as a potent tool for contemporary businesses seeking heightened profitability, enhanced performance, and a competitive edge. The data stemming from financial and operational activities, such as general ledger accounting, can be harnessed by companies to garner insights and refine strategic planning. A prime illustration of this is the record-to-report (R2R) process, which entails the systematic collection, organization, and analysis of a company's financial data. The goal is to produce precise and comprehensive reports, accompanied by actionable insights of strategic significance.

The efficiency of the R2R process hinges on the internal controls, workflows in place, and the overarching data management strategy of the organization. Executing the R2R process within the stipulated time frame can be a formidable task for finance and accounting teams. Nevertheless, delving into the intricacies of the record-to-report process, comprehending its significance, and adopting best practices can empower companies to refine their business processes. This, in turn, positions them to achieve growth and innovation goals while fostering a healthier bottom line.

Understanding Record to Report (R2R)

Record to Report (R2R) is like the financial storyteller for a company. It takes care of everything related to money – from recording everyday transactions to processing the information and finally presenting it in easy-to-understand reports.

Imagine R2R as a superhero that ensures the company's financial information is not just a bunch of numbers but a clear and accurate story about how well the company is doing, which is simple to understand. R2R starts by recording all the money that happens daily, ensuring no detail is missed. Then, it processes this data carefully, turning it into valuable reports that show the company's financial health. It's not just about math; it's about telling a story with the numbers.

Think of R2R as a guide that helps the company make smart decisions. It doesn't just show the numbers; it explains trends, risks, and opportunities. This allows the decision-makers to plan where the company should go next and ensures all financial records are accurate and transparent. 

Optimizing the R2R Process

Optimizing the R2R process for a faster financial close involves streamlining and enhancing each stage of the financial reporting journey. Here are some strategies to achieve a more efficient R2R process:

Process Automation: Implement automation tools for routine and manual tasks, such as data entry, reconciliation, and journal entries. Automation reduces the likelihood of errors and accelerates the entire process.

Smart Integrations: Invest in integrated financial systems that facilitate seamless data flow between different modules, eliminating the need for manual data transfers and reducing the risk of discrepancies. It makes the entire process much faster and transparent.

Real-time Reporting: Move towards real-time reporting capabilities. Utilize technology that allows for continuous monitoring and reporting, enabling timely identification and resolution of issues.

Data Quality Assurance: Prioritize data quality by implementing validation checks and ensuring data accuracy at every step. High-quality data minimizes the need for rework and corrections later in the process.

Parallel Processing: Implement parallel processing, allowing multiple tasks to be performed simultaneously rather than sequentially. This approach can significantly reduce the time required for the financial close.

Close Calendar and Deadlines: Establish a close calendar with clearly defined deadlines for each task in the R2R process. This helps in creating a sense of urgency and ensures that everyone involved is aligned towards achieving a faster close.

Exela’s Smart R2R Solution

Exela's Record to Report solution streamlines financial operations with accurate, automated, end-to-end processes. Customizable rules-based BOTS tailored to your company's needs eliminate manual work, identify trends, and save time. The solution includes a BPM layer automating journal entries, ensuring compliance, and providing process insight.
 

- Exela's Record to Report solutions automate reconciliation and journal entry processes, enhancing accuracy, ensuring compliance, and delivering cost savings through efficient automation.

- Utilizes a robust financial tracking platform, integrating all data into a single system, employing AI-driven analytics, and visualization tools to derive actionable insights, identify patterns, and anticipate future trends.

- Employing collaborative tax strategies, our solution aids in identifying and documenting qualifying tax credit activities, maximizing reimbursement by exploring methods like cost segregation and last-in-first-out (LIFO) accounting to reduce taxable income and expenses.

In a world where numbers are crucial, R2R ensures that the company's financial information is spot-on, building trust with everyone involved – from the management inside the company to the investors outside who are keeping an eye on things. Get in touch with us to learn more about Exela’s R2R solution. 

Efficient and strategic financial management is crucial for the growth of any organization. One of the key components of financial management is maintaining an accurate and up-to-date general ledger.

Traditionally, general ledger accounting involved manual entry, extensive paperwork, and the risk of human error. However, with the advent of modern technology, financial management software has revolutionized how businesses handle their general ledger accounting. Let's explore how financial management software can streamline and enhance your general ledger accounting processes.

Understanding General Ledger Accounting

General ledger accounting is a fundamental component of a company's overall accounting system. It is the central repository for recording and organizing financial transactions and maintaining the company's financial records. It offers a comprehensive and systematic overview of an organization's financial activities, enabling accurate and reliable financial reporting.

At its core, the general ledger is a master record that contains all the individual accounts used to classify and summarize financial transactions. These accounts include assets, liabilities, equity, revenue, and expenses – with so much information to process, something can easily go wrong if maintained manually!

Still Using Traditional Manual Accounting Processes?

Manual general ledger accounting poses risks related to human error, time inefficiency, data accuracy, auditability, scalability, and compliance. Adopting financial management software and smart solutions can mitigate these risks, improve accuracy, streamline processes, and enhance overall financial management capabilities. Here are some of the pitfalls of manual general ledger accounting:

Difficulty in Tracking and Retrieving Information: Without automated systems, retrieving specific transaction details or generating reports may become time-consuming and challenging. Locating and verifying information within extensive manual records can be cumbersome and prone to errors.

Lack of Audit Trail: Manual general ledger accounting may lack a reliable audit trail, making it difficult to trace and verify the accuracy of transactions and adjustments. An audit trail is crucial for internal control, compliance, and identifying potential fraud or errors.

Inefficient Reconciliation: Reconciling accounts manually can be a complex and time-consuming process. It involves comparing multiple documents and ensuring that all transactions are accurately reflected in the general ledger. Manual reconciliation increases the risk of overlooking discrepancies or making mistakes during the process.

Limited Scalability: As the volume of transactions and the complexity of the business grow, manual general ledger accounting becomes increasingly challenging to manage effectively. It may lead to inefficiencies, errors, and difficulties in handling the increased workload.

Security Risks: Manual records are susceptible to physical damage, loss, or unauthorized access. Protecting sensitive financial information and maintaining data confidentiality becomes more challenging without the security measures provided by financial management software.

Smart Financial Management Software Improves Accuracy, Efficiency and Security

Introducing smart financial management software can greatly benefit your general ledger account, here’s how:

Automating Data Entry:

Financial management software eliminates the need for manual data entry, reducing the likelihood of errors and saving valuable time. It can directly integrate with various systems and capture financial data automatically, such as transactions from sales, purchases, payroll, and bank accounts. By automating data entry, the software ensures accuracy and allows your accounting team to focus on more strategic tasks.

Real-Time Updates and Accuracy:

With financial management software, your general ledger is always up-to-date. As transactions occur, the software records them in real time, eliminating the need for manual journal entries and reducing the risk of overlooking or duplicating entries. This real-time updating ensures accurate financial reporting and provides management with timely insights into the company's financial health.

Streamlined Reconciliation:

Reconciling accounts can be a time-consuming and error-prone process. However, financial management software simplifies this task by automating the reconciliation process. The software can match transactions, identify discrepancies, and provide alerts for any inconsistencies, ensuring that your general ledger remains accurate and balanced.

Improved Financial Reporting:

Financial management software offers robust reporting capabilities, allowing you to generate customized financial reports effortlessly. These reports provide valuable insights into your organization's financial performance, including profit and loss statements, balance sheets, and cash flow statements. The software's reporting features enable you to analyze data, identify trends, and make informed decisions based on accurate and up-to-date financial information.

Enhanced Security and Compliance:

Financial management software maintains security and protects your sensitive information from unauthorized access. Additionally, the software often incorporates compliance features that help ensure adherence to regulatory requirements and accounting standards, reducing the risk of non-compliance penalties.

Scalability and Integration:

As your business grows, so does the complexity of your general ledger accounting. Financial management software provides scalability to accommodate your expanding needs. Whether you have a small startup or a large corporation, the software can handle the increasing volume of transactions and adapt to your changing requirements.

Furthermore, many financial management software solutions integrate with other business systems such as customer relationship management (CRM) software and enterprise resource planning (ERP) systems, enabling seamless data flow and enhanced efficiency across departments.

Financial management software has become a game-changer for general ledger accounting. By automating data entry, ensuring real-time updates, streamlining reconciliation, improving financial reporting, and enhancing security and compliance, this software empowers businesses to optimize their financial management processes.

Want to learn more? View our robust FAO services or get in touch with us and our team can answer your questions and guide you with the right solutions.

At present, the financial sector is undergoing a pivotal moment where data has emerged as the core of all interactions. As financial institutions strive to shift from being mere intermediaries to becoming advocates, they must adjust their strategies in line with the changing digital landscape and incorporate new technologies. It is crucial to prioritize the key areas of focus, as juggling too many initiatives simultaneously can tie up resources and hinder innovation. 

While banks are still slow in adopting technology, FinTechs are using innovative technology to deconstruct traditional banking services into point solutions that can be rapidly deployed and adopted. 

Your competitiveness in the market hinges on your ability to concentrate and invest in the critical priorities that can have the most significant impact in the areas that count the most.
 

Why do Banks and Financial Service Providers Need to Undergo Digital Transformation?

Financial service providers are undergoing digital transformation due to the increasing demand for personalized services, intuitive interfaces, and robust security within financial services. This demand has led to an urgency to adopt data and insight-driven approaches. The financial sector, including banks, insurers, and payment processors, is exploring various technologies, such as cloud services and automation to enhance security and artificial intelligence for personalized services, to achieve a successful digital transformation.

This trend is responsible for reducing the risks inherent in digital transactions while increasing revenue and efficiency gains. Statistics suggest that technology and digital transformation improved operational efficiency by 40%, had faster time to market (36%) and the ability to meet customer expectations increased by 35%.

 

The Focus Should be on Leveraging Technology and Digital Power to Drive Growth

Today's customers, predominantly millennials and Gen Z, are driving banks to transform their operations. FinTechs are disrupting the traditional banking industry by leveraging technology to offer innovative financial solutions. By using modern technology and data analytics, fintechs can provide personalized financial services to customers at a lower cost than traditional banks. 

Additionally, fintechs often offer a more seamless and user-friendly experience, as their platforms are designed with modern user interfaces and functionality. These factors have made fintechs popular among younger consumers and those who prefer the convenience of online banking. While traditional banks still dominate the financial industry, fintechs are gaining traction and have become a significant disruptor in the market.

Technology is playing a significant role in all aspects of the industry, from retail banking to mobile apps, fintech, and neobank startups. Banking leaders are investing more in future-fit tech strategies and accelerating digital transformation, as evidenced by the increased investment in this area. According to Insider Intelligence forecasts, the banking sector’s overall IT and technology spending in the US is expected to rise from $79.49 billion in 2021 to $113.71 billion in 2025.

Technology can help banking in numerous ways: 

• - Enhanced Customer Experience: Technology enables financial institutions to provide more personalized and intuitive customer experiences through digital platforms, mobile apps, and other innovative channels.
• - Improved Efficiency: Technology can streamline banking processes, automate manual tasks, and reduce operational costs.
• - Increased Security: Technology offers robust security features that protect customer data, prevent fraud, and safeguard against cyber threats.
• - Data Analysis: Technology provides advanced analytics tools that enable banks to extract insights from large volumes of data, such as customer behavior, market trends, and risk management.
• - Innovation: Technology drives innovation, enabling the development of new financial products and services, such as blockchain-based solutions, mobile payment systems, and robo-advisory platforms.

Overall, technology is crucial in driving growth, improving efficiency, enhancing customer experience, and enabling innovation in the banking and financial sector while keeping customer satisfaction at the core.

Key Priorities that Leaders must Focus on to Drive Transformation and Innovation in the Banking and Financial Industry:

Embrace digitalization: Adopting a digital-first approach and driving end-to-end digitalization is essential for banks to stay competitive and offer customer-centric products and services. This involves leveraging advanced technologies like AI, cloud, and automation to drive innovation, improve workflows, and foster an ecosystem of reliable partners. Exela can help prioritize digitalization and assist banks to build a more harmonious and secure internal and external ecosystem.

Streamline processes and products: In today's post-pandemic environment, optimizing day-to-day operations and workflows is critical to delivering a seamless customer experience. Banks must modernize legacy systems, migrate them to the cloud, and use technologies like AI and robotic process automation to streamline back-to-front office operations.

Deploy regtech solutions: Regtech solutions are essential for ensuring regulatory compliance and minimizing the risk of compliance failures. By prioritizing regtech, banks can ensure more robust reporting, minimize human error, and enhance the customer experience in areas like KYC.

Embrace open banking: An open API ecosystem enables banks to assemble best-in-class financial services that cater to the unique needs of their customers. Moreover, banks must design processes and systems while keeping API at the core to compete with FinTech, which use the same approach. Exela offers Treasury as a Service (TaaS),  enabling banks to deliver future-ready invoicing experience to improve customer satisfaction.

Ensure robust cybersecurity: As digital technologies become more prevalent, cybersecurity is an ever-present concern. Banks must use the latest tech tools for cyber defense and IT delivery to ensure secure banking experiences for their customers. A strong governance framework, regulatory risk assessment, and control testing and remediation monitoring are critical components of a stable and safe IT landscape.

Here’s how Exela can help

Our expertise in digital transformation, automation, and innovative technologies has been instrumental in helping banking and financial industry customers tackle operational challenges and meet customer expectations. 

The key imperative for banks is the need to design processes and systems from first-principles in order to compete with fintechs that are using similar approaches to deconstruct traditional banking services into point solutions that can be rapidly deployed and adopted. The question, therefore, is not whether a bank should add remittance features to a DACA account, but rather ask, what is needed for the remittance function or workflow, and how the bank can best service that requirement. This often leads to a process-first, API-first way of thinking, and the adoption of a fairly transparent "open banking" approach where the necessary account structure (not always a DACA) and risk framework are chosen so that the clients' time-to-market and speed-to-onboard metrics are met.

For example, online lending or account origination cannot co-exist in a workflow that needs 3-4 weeks and requires a manual DACA account to operate. 

We have assisted banks in transforming their operations, expanding commercial client relationships with comprehensive invoicing automation, cash management, treasury services and more.

Get in touch to know how our banking and financial industry clients have leveraged Exela’s expertise and advanced technology for their operations.

While technology can’t eliminate taxes, it can make the process seem a whole lot less painful—for both taxpayer and tax administrator. That’s what we were celebrating on Monday, August 12, 2019, when Exela hosted a lunch at Andiamo on Detroit’s breathtaking riverfront in conjunction with the FTA (Federation of Tax Administrators) Annual Technology Conference and Exhibition. The FTA has been around since 1937, working to improve the quality of state tax administration. In recent years, technology has played a key role—transforming data, documents and records into mission-critical content, supporting complex information processes at all levels, and streamlining all aspects of customer communication. A leader in this space, with a current count of 39 state agencies and 15 departments of revenue/taxation among our customer roster, Exela was delighted to host agencies from all over the country for a satisfying “chat-and-chew” featuring delicious food, breathtaking views, and insights into some of what’s trending in tax administration transformation, including:

- Lockbox implementation

- Online Customer Exceptions management

- Data processing and keying support for refunds, filing extensions, and other exceptions items and correspondence

- Mailroom servicing, including certified mail receipt tracking, barcoding technology to facilitate and expedite sorting

To give you a sense of how this all translates into real life, here’s an actual case study of how Exela gave Alabama’s Department of Revenue a brand new, automated tax return processing system that reduced average tax return turnaround from 14+ days to less than 48 hours and added up to more than $2,000,000 in annual savings through W-2 fraud detection and prevention. Waving bye-bye to legacy systems (which enabled backlogs, duplication, error, and fraud) and the high cost of tax-season hiring, the Department also managed to relieve itself of 30,000 square feet of warehouse space.

Want more information on how Exela is bringing technology to bear in tax return processing? Contact us today! For more information on upcoming events Exela is hosting or participating in, check our Events page here.