Robert Kugel's Analyst Perspectives

Trintech provides finance departments in larger and midsize enterprises with software to accelerate their accounting close processes while achieving hard and fast accuracy and compliance requirements with less effort. The financial records of an enterprise must be periodically reviewed and summarized to create financial statements that inform executives and interested third parties of the organization’s financial condition and performance. A consolidation of the financial records and other departmental close processes involves an intricate set of repeated processes that must be performed in a prescribed order and fashion. Enterprise software enables finance and accounting departments to be more productive throughout the close by automating calculations, coordinating the execution of processes and facilitating communication among participants.

For larger and even midsize enterprises, software is needed to handle the record-to-report (R2R) cycle because it can be complex, requiring the coordination of numerous people in and outside the department, as well as multiple systems and sources of data. Beyond financial consolidation, the R2R cycle includes performing reconciliations and adjusting of entries during the close as well as authoring, editing and updating narratives in the creation of disclosure documents. All of these must adhere to internal controls that require defined processes including reviews and approvals by multiple individuals. During the financial close, all financial transactions are reconciled, reviewed and adjusted as needed to prepare the financial statements. These include the balance sheet, income statement, cash flow statement and the statement of shareholders’ equity. There are iterative portions of the process that involve cycles of reviews and levels of approvals. For publicly held corporations, financial statement quality and fidelity are of utmost importance. The desire to make the department more productive and resilient has led to increased investment in technology to assist in performing the full consolidate and close cycle.

One key objective within the R2R process is to minimize the time it takes to complete the accounting close, with the generally accepted norm being one business week. Shortening the close means that all downstream tasks can be finished sooner, providing executives, managers, directors and shareholders with information about the enterprise’s financial performance and health sooner. ISG Research asserts that by 2028, two-thirds of finance and accounting departments will improve their use of readily available technology to close their quarterly books within six business days, up from one-half that can do it today.

Trintech provides Cadency, a platform that streamlines balance sheet reconciliations; handles high-volume transactions matching and intercompany accounting chores to reduce workloads; automates journal entry creation and posting to ensure consistency, accuracy and auditability; and that documents financial governance models and handles their compliance and related reporting. It also has software for managing the close process, and the platform also applies analytics to identify areas of financial risk and offer strategies for addressing them. These capabilities have become even more essential as remote and hybrid working have become the norm, since they can overcome the challenges of managing time-sensitive, business-critical processes in a more complex working environment that makes collaboration and coordination difficult. To support these functions, it’s necessary for enterprises to facilitate data integration, which Trintech does though targeted APIs, integration with common ERP systems and its data-as-a-service offering.

Cadency Direct, built on the ServiceNow platform, automates a department’s close-to-report processes while providing native workflows and triggers to enterprises using the Now Platform. Our financial close research has found that tighter control of the intricate operations involved in the financial close, as well as an ongoing continuous improvement approach to refining the processes are regarded as the most effective ways of streamlining and shortening the close process. Not only does software like Cadency Direct help ensure that tasks are started on time, that hand-offs are smooth and timely, and that there is complete visibility into the status of the process at any time, it ensures that the close is managed consistently and, as enterprises refine that process, those changes remain baked in.

For midsize enterprises, Trintech offers Adra, software for transactions matching, account reconciliations and task management, along with related analytics to provide visibility and insight to evaluate the department’s efficiency and quality in managing the close process. Adra is designed specifically for the budgets and operating needs of midsize enterprises by streamlining the implementation process, reducing the amount of training required.

Transactions matching substantially reduces the time spent ensuring the accuracy and fidelity of financial statements by automating the tedious tasks of matching transactions with bank and credit card statements, point-of-sale systems, and other internal or external sources of data. Midsize enterprises typically do not have the transactions volume and complex legal entity and systems complexity typical of larger ones, and Adra offers an advantage in its cost to deploy and maintain, without sacrificing performance. Additionally, Trintech and Planful have a strategic partnership in place to provide finance organizations with an integrated close management system that includes Planful’s consolidation system. The combination enables enterprises to accelerate their R2R process while increasing control and auditability.

Trintech’s T-Recs simplifies and automates the reconciliation process by integrating with various transactional systems. The software matches transactions between different systems, ensuring that discrepancies are identified and resolved promptly. T-Recs is designed to address the needs of organizations with large volumes of transactions, providing immediate insights into discrepancies to keep the accounting staff ahead of the curve. ReconNET is designed to automate high-volume transaction and matching to accelerate reconciliations while providing detective and preventative controls for risk management.

Trintech is a member of Built on Workday, a program that makes it possible for partners to apply their intellectual property to create and maintain applications that operate natively on the Workday platform. The software is available on the Workday Marketplace to facilitate its acquisition.

For more than two decades, our research has focused on practical and affordable processes and technology to streamline the operations of finance and accounting departments. Steady advances have increased the importance of using automation to enable enterprises to use software to speed the close while promoting accuracy and control, allowing finance and accounting staff to spend more time on work that takes advantage of their experience and expertise. These advances will continue over the next five years, especially the use of artificial intelligence using machine learning (AI/ML) to identify potential errors and fraud and further reduce the time spent by the staff on repetitive processes. Cloud-based systems enable vendors to immediately incorporate advances in their software so that they are available to customers without their having to upgrade.

I recommend that enterprises review the systems and processes they use to manage their R2R cycle. Those that take longer than one business week to complete their accounting close should investigate how technology can accelerate and improve their performance. As part of that process, I recommend that they investigate how Trintech’s offerings can help streamline and shorten their accounting close.

Regards,

Robert Kugel