The new way to consolidate comes from leveraging leading cloud financial management systems. The characteristics of this type of configuration include four critical differences from other traditional, on-premise solutions.
1. The scalable accounting foundation enables automation
Healthcare firms are often adding virtual and physical entities to their corporate structures. However, traditional accounting and finance systems struggle to add these entities. On-premise solutions cannot replicate the systems and processes for new entities and across geographic jurisdictions.
Cloud-based financials alleviate this shortcoming, enabling you to add new business units seamlessly and without any additional investments in hardware, software, or configuration. When one integrated system gets leveraged, training and user resources are readily available to support the implementation.
When all business units–regardless of location, old and new–use the same system, you achieve significant productivity gains. Automation means you can redeploy corporate accounting staff to more strategic activities. Finance’s role changes from a mere preparer to the analyzer and reviewer. It creates a shift in mindset and positions finance to add value to information and move beyond simply reporting it.
2. Supporting Faster Growth
Many healthcare firms are moving quickly to capitalize on growth and M&A opportunities. Finance must be agile enough to support rapid changes by establishing books and records that align with the rest of the company. A turnkey solution can get systems and processes up and running to generate valuable information to support all of the decisions that happen when a new entity is created or acquired. At the same time, the corporate accounting group wants and needs to roll-up a new entity without missing a beat.
Cloud financial management systems are ideal for ramping up new entities. Existing practices, perhaps with similar business models, can be used to quickly configure the accounts of new entities. Report writers can adjust to the reporting needs and meet different GAAP and healthcare-industry requirements. You can adapt the chart of accounts to meet the needs of the new business unit.
At the same time, because one system forms the backbone of the organization’s systems and processes, you have the luxury of centralizing core finance functions, such as accounts receivable or accounts payable. That translates into a significant opportunity to leverage one database of customers and vendors across the consolidated organization.
3. Managing the Consolidation Process
Cloud-based financials allow for all consolidation information to be fully integrated at any point in time. This puts all the data from every geography, business line, specialty, or other segments at the fingertips of the corporate accounting staff. This can virtually eliminate the back-and-forth emails between corporate accounting and the various business units. The corporate accounting staff has drill-down transparency into the data of each business unit to enhance its own understanding of the financials as the results roll-up.
Leading cloud-based finance systems also have collaboration and documentation tools built in, such as chat functions and electronic notes that can be documented and attached to relevant accounts and reports. Say goodbye to cumbersome binders or file directories full of spreadsheet backups.
Leading cloud financial management systems centralize the set up and management of inter-entity relationships. Bringing greater visibility to inter-corporate transactions between entities. Since the data is housed inside a single system, the elimination and consolidation entries can be automated. Intercompany accounts are automatically reconciled, and elimination entries posted to deal with intercompany transactions and balances. This mitigates the risk of missed postings of inter-company transactions on one side or the other.
4. Better Insight
Traditional consolidation processes often create a data gap between systems and spreadsheets that inhibits transparency, limits insight, and creates a latency between when activities happen and when they get reported.
Cloud-based financials eliminate the gaps between the consolidation and the data–which has a profound outcome. Real-time consolidated financial information becomes available to decision-makers at the push of a button. This eliminates the “black box” of accounting that often arises when the executives must wait weeks to see consolidated financial results, which can disrupt and delay important decisions.
