Abstract
Several years after being forced to restate financials, a large U.S. financial services company was still struggling to get its financial processes in order. In the meantime, its external auditors had also uncovered a number of significant weaknesses and deficiencies in those financial processes. The company needed to strengthen its finance organization’s capabilities so that it could operate effectively in the future.

The Challenge
The company’s finance organization had difficulty completing end-of-year reporting and frequently did not issue quarterly financial statements on time. Using offline databases and spreadsheets, the finance organization was slowly making progress in addressing these issues, but these processes and tools were clearly insufficient to support the real-time demands of the business. Specific challenges included:

• Disconnect between operations and finance. The company structure lacked clear-cut roles and responsibilities to coordinate back-office operations and financial operations. This led to the repetition of key operational procedures, resulting in duplication of effort, excess cost and longer timelines.
• Personnel shortage. The finance function was understaffed by more than 100 people. Key positions – including the chief financial officer and controller – were sometimes vacant.
• Multiple systems. Financial data resided in multiple, disconnected systems throughout the organization, hampering data collection, analysis and reporting.
• Complex processes. Multiple data handoffs slowed the progression of data through the organization and increased the risk of errors.
• Insufficient controls. A weak control environment made errors difficult to detect and fix and compromised the ability to produce a transaction history and audit trail. The weak controls were pervasive in key systems, requiring extensive duplication of effort and cross checks.

How We Helped
The company launched a full-scale effort to improve its finance organization. With Deloitte’s assistance, the company:

• Improved alignment between operations and finance by redefining roles and responsibilities across the two functions, including responsibility for controls and handoffs
• Built a set of effective controls, processes and events around its information technology environment
• Hired, trained and coached finance personnel to effectively fill necessary roles
• Streamlined processes and clarified roles and responsibilities to limit data handoffs and create clear ownership of data
• Developed a process for performing a self-evaluation of financial results, which allowed the finance function to check the accuracy of its reports

Lessons Learned
The company has significantly enhanced its financial processes. It is now able to issue quarterly financial reports on time and expects to solve its significant weaknesses during 2008. In addition, many core financial processes have shown marked improvement. For example, end-of-period statements that used to take more than 60 days to issue will take less than 20 days when the company’s improvement efforts are complete. Further, the company expects to reduce costs by more than $25 million annually because of the finance organization’s process and infrastructure improvements.

Related Content:
Resource Library: Finance Transformation Case Studies 
Overview: Financial Management 

As used in this document, the term “Deloitte” means Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Tax LLP and Deloitte Financial Advisory Services LL, all subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.