Closing in ERPs

Understanding Microsoft’s Environment for Finance and Accounting: Options Aplenty for the Open-Minded — But Where To Start?

Jun 16, 2022 | By Shivang Patel

FloQast has helped hundreds of customers optimize their investment in Microsoft's Environment for Finance and Accounting operations.

ERPs Can’t Do It All

Implementing an enterprise resource planning (ERP) system is usually one of the first — and most significant — steps taken by finance and accounting leaders as their organizations grow. It gives businesses the foundation they need to standardize and improve mission-critical processes — such as the Financial Close — while offering a degree of visibility previously missing.

However, given lengthy implementation times and substantial costs associated with introducing an ERP, many businesses attach inflated expectations to the solution, insisting that its mere presence and promised functionalities will transform the Finance and Accounting teams dramatically — now, and for years to come. According to a 2021 survey of controllers, 57% of respondents stated that the month- and year-end Closes are in desperate need of modernization. To address the reality of what ERP’s can and cannot do, Gartner recommends a composable ERP strategy to “Drive agility and flexibility into business strategies through a technology approach that integrates multiple applications and platforms.”

Unfortunately, that simply isn’t the case, and that puts accounting teams in a bad situation. According to a recent Gartner Group report, “Midsize enterprises’ (MSEs’) extreme focus on a single perfect ERP suite to cover all current business needs hampers the creation of an adaptive and future-proof ERP.”

Understanding the capabilities and limitations of an ERP system puts accounting teams in a great place. Knowing how to build on that foundation to create streamlined, sustainable, and easily repeatable processes is what comes next. In the end, knowledge is power. So where do we start? 

No Perfect Answer

There isn’t such a thing as an accounting panacea, but that doesn’t mean people won’t stop looking. 

It’s not uncommon for accounting teams to risk develop unrealistic expectations post-implementation that can hamper progress and stunt potential for excellence. Understanding what an ERP is capable of, what it excels at, and where there’s room for improvement is vital to scaling as an organization.r

What an ERP does represent is a foundation. With a robust ERP like Microsoft Dynamics in place, accounting teams have the solution for recording and classifying transactions. But that doesn’t mean an accountant's responsibility ends with recording transactions. They need to manage a range of functions across record-to-report, like the expenses, Accounts Receivable, Accounts Payable, Financial Close, consolidation, reporting, planning, compliance, and more.

Simply put: An ERP is a start — a good one. It doesn’t mean that the race has been run.

Adopting a Proactive Approach

So what are accounting organizations supposed to do following their successful ERP implementation? 

Research.

The Microsoft Environment for Finance and Accounting offers a bevy of solutions to help with everything from integrating the company’s CRM, to project management and document creation tools, to solutions designed to help the team better organize and execute the Financial Close, like FloQast. Identifying what problems exist, finding potential partners, and vetting all options is the next logical step accounting leaders should take. This time, however, they don’t have to expect something as daunting as a multi-month ERP transition.

Challenges to Overcome

Controllers and their teams new to Microsoft ERPs are prone to manage the Financial Close as they had before, utilizing spreadsheets, email, and cloud storage solutions as best they can. 

But while these solutions function together, managing the Close in this manner presents a number of challenges. Beyond email, spreadsheets, messaging applications, and data storage, finance and accounting teams need an intelligent way to manage their unique workflow that requires transforming data into information, orchestrating teams and tasks against hard deadlines, and capturing evidence in support of compliance and the audit. 

Ultimately, managing the Close in this manner can lead to a number of challenges that can come back to haunt accounting leaders down the road. Whether it be version control issues after teams inevitably have to manually reconcile trial balances generated and downloaded from the ERP, inconsistent processes that lead to repeated work and balls being dropped, or the simple lack of visibility — for leadership and colleagues — this manner of closing the books is simply too error-prone to be relied upon.

This goes back to adopting the right mindset. Understanding that the right solution is in place, and that its ecosystem offers numerous opportunities to streamline the processes that go into such mission-critical tasks as the financial Close puts controllers on the road to consistent innovation: “What works well right now might not in two years. How can we ensure the team is consistently tweaking and improving to ensure we’re ready for that day?” 

The Next Steps

Microsoft’s solutions lay the foundation for digital transformation by automating the capture of transactions, storing documents, driving collaboration, and capturing the range of tasks necessary to execute key processes in the record-to-report lifecycle. 

But as organizations reconfigure the business at speed, accounting and finance teams need to level up digital transformation to optimize their Microsoft investment and further increase financial velocity and accuracy.  

FloQast has helped hundreds of customers optimize their investment in Microsoft's Environment for Finance and Accounting operations. Using FloQast, they have reduced manual data manipulation and automated the Financial Close, increased their ability to collaborate on the range of tasks that require cross-team coordination, possess real-time visibility into the status of the Close, and now have centralized controls and documentation to drive a virtual audit. 

Learn more about how FloQast works with Microsoft's Environment for Finance and Accounting operations today!

Shivang Patel
Shivang Patel is the Senior Director, Growth Markets at FloQast. Prior to joining the team in 2015, Shivang was an accounting manager and early FloQast user before making the leap and starting as an account executive at FloQast. Since then, Shivang has launched and scaled FloQast's Sales Engineering team before taking on his current role in early 2022.

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