Sap R2P

Reinventing Record to Report For
Worry-Free Governance
Session 402
IASA 86TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Background
• Syril Mathai, CPA

– Trintech, Inc.
• VP – Global Services and Partner Enablement
• 15 years Corporate Accounting Experience
• 5 years Consulting (Management and Implementation)
• Former Customer for Trintech (6 years)
Gaining Complete Confidence
in your Numbers:
Reinventing the Record-to-Report Process
AGENDA
• Why Record-to-Report?
• Record-to-Report Challenges
• Reinvention Approach
• Solution-in-Action: Case Study
• Summary & Next Steps
© 2014 Trintech, Inc. All rights reserved. Cadency, ReconNET and Rhythm of Finance are registered trademarks of Trintech, Inc.
“Out of intense
complexities intense
simplicities emerge.”
Winston Churchill
Improving the Record-to-Report
Process
• Focus relentlessly on driving Process Simplification & Standardization

to combat increasing business & regulatory complexity.
• Invest in Integrated Close to differentiate from peers relative to business

performance & financial reporting
• Broad organizational value (through reliable information and business

directed focus) provided by efficient and effective consolidation and
close process.
• Integrated Systems & Single version-of-the-truth are critical to success

for R2R process; enterprise-wide data standards & associated
governance are requisite foundations.
• All Top Performing R2R organizations leverage technology extensively

as an important component of the Integrated Close
Gartner View on R2R
Market Adoption Accelerating for Financial Solutions
Gartner continues to define Financial Governance as a whole and also in two
subsections, with a strong emphasis on Financial Governance Suites.
Financial Governance Suites Advantage 0 to 2 This is an emerging area and financial governance
suites offer a strategic solution with new solutions
entering the market in the last year. Evaluate against
disclosure management and close management
solutions.
Disclosure Management Choice 0 to 2 If your current disclosure processes are manual and
rely on spreadsheets, evaluate within the next 12
months. These offerings are maturing in depth and
scope.
Close/Reconciliation Choice 2 to 5 If your current close processes are manual and rely
Management on spreadsheets, evaluate within the next 12
months. Evaluate the whole close process. Try to
avoid tactical purchasing of reconciliation
management solutions.
Source: Gartner IT Market Clock for Financial Management Applications, August 2012
Chief Accounting Officers’
Challenges
“Our goal is to remain on the constant improvement curve

because there will be persistent cost pressure on finance.”
– Intel CAO
“What I do not know (unknown risk) and lack of communication

between key departments”
– General Motors Controller and CAO
“Risks of things falling through the cracks as things are handed

off between shared service centers”
– J&J VP, Controller and CAO
“Changing regulatory environment”

– Best Buy SVP, Controller, CAO
The CFO’s Perspective
Evaluating Record-to-Report risk & performance:

• What is our R2R risk?
1. Manage Risk • Do our processes complement our risk
appetite?
• Are we doing the “right things” – in the

right order?
2. Increase • Are we missing critical steps?
Effectiveness •
•
Are these steps auditable?
Are they sustainable?
• Are we “doing things right?”

3. Increase • Are we leveraging technology, people and
Efficiency processes for maximizing value and ROI?
What’s Really Going On?
Myth: Reality:
Many expensive
Highly educated controllers/FP&A
finance personal are professionals
working on value spending 2/3 of their
added activities time or more on low
value information
activities
The Approach
THE COMPLETE APPROACH
Reduce Risk
RISK
RISK
RISK
RISK
RISK
The Complete Approach
Reduce Risk
RISK
Increase Effectiveness
RISK
Transformation & Process
Improvement
Regulatory Deadline
Regulatory Deadline
Reduce Time & Mitigate Risk
Transformation & Process
Improvement
Regulatory Deadline
Reduce Time & Mitigate Risk
How the R2R Process Often Works
© 2014 Trintech, Inc. All rights reserved. Cadency, ReconNET and Rhythm of Finance are registered trademarks of Trintech, Inc .
SAP®
Close Cockpit
Legacy Systems
Outsourced
External
SAP®
Close Cockpit
Legacy Systems
Outsourced
External
SAP®
Close Cockpit
Legacy Systems
Outsourced
External
How Trintech Helps
The first, unified financial governance

solution to reinvent the entire Record-to-
Report process
© 2014 Trintech, Inc. All rights reserved. Cadency, ReconNET and Rhythm of Finance are registered trademarks of Trintech, Inc .
“To improve is to
change; to be perfect
is to change often.”
Winston Churchill
BALANCE SHEET
• Quantitative and Qualitative steps synchronized
• Provides transparency for all activities
• Immediate view to Balance Sheet progress, by
Financial Statement Line Item
• Status of activities by criticality and due date
23
R2R SUMMARY
MANAGES ALL CLOSE RELATED
FUNCTIONS
Transparency for all “Close Task” related
activities:
• Journal Entry
• Reconciliations
• Disclosures
• Compliance
• Analytical
• Technical
• Organized by Close calendar, Entity
24
CERTIFICATION
MANAGES ALL GENERAL LEDGER

RECONCILIATION PROCESSES
• Provides transparency for all
reconciliation-related activities
• Activity & Issue status filtered by
Entity and day-of-close
• Activity & Issue status filtered by:
• Individual roles / assigned
permissions
• Entity and day-of-close (or date)
25
COMPLIANCE
MANAGES ALL COMPLIANCE
PROCESSES
• Provides transparency for all
Compliance-related activities
• Controls linked to task
execution
• Activity & Issue status
• Progress of remediation
• Exception management
26
COMPLETION
MANAGES REPORT
CREATION
• Preparation of
documents required
for regulatory and
statutory reporting.
• A collaborative
platform to create,
update, edit, review
and finalize
documents
• Embedded XBRL
tagging
27
CADENCY
VISIBILITY AT A
SINGLE VIEW
• Understand the
status of R2R in a
single combined
view
• Drill down into status
within organization
across process
• See the impact of
one process to
another within R2R
28
Accomplishments Through
Improvement
 Full awareness of required activities within

the R2R effort
 Reduction of close-day cycles through Collaborative Controlled
removal of non-value added activities in Disclosures Journals
Efficient
close cycle Controls
Testing
Reducing
 Increased quality in reconciliations through Full Close
risk based approach Awareness Days
of R2R
 Reduced effort in monitoring compliance Effort
initiatives by leveraging test data from
shared controls Efficient
G/L
 Structured and controlled journal entry Recons
processes through standardized journal
forms, automated approvals and postings
 Collaborative approach for Disclosure
Management with full visibility back to R2R Process
supporting processes Improvement
29
Summary
Cadency reinvents, transforms and

shortens the entire R2R cycle
By establishing a repeatable “Rhythm of Finance”
through orchestrating all stakeholders, activities and
interoperable processes in a collaborative, real time
workflow environment
Cadency reduces costs & improves
efficiency enterprise-wide
By optimizing resources, costs, risks and activities
across the entire finance organization worldwide
through:
Transparency and control across the governance
model for the R2R cycle
Empowering continuous process improvement
methods across the entire cycle
Cadency enables “controlled agility”
By facilitating easy realignment for an ever-changing
business and regulatory environment
W&SFG Case Study
Improved Compliance through an

Effective and Efficient Close Process
Background
• Wade M. Fugate, CPA

– Western & Southern Financial Group
• AVP & Assistant Controller
• 10 years Corporate Accounting Experience
– Responsible for GAAP and statutory close, analysis, consolidation,
internal management reporting and external regulatory reporting
– Responsible for Investment Accounting and Reporting and Variable
Annuity Accounting and Reporting
– Responsible for expense budget and cost allocation processes and
analysis
– Ernst & Young LLP

• 6 years external audit experience auditing life insurance
companies
Western & Southern Financial Group
 Company History
• Founded in Cincinnati in 1888 (The Western and Southern Life Insurance
Company).
• Provides life and health insurance, annuities, mutual funds, investment
management, broker-dealer services, and real estate investment and
property management through member companies across 50 states.
• Fortune 500 company with assets owned and managed in excess of $68
billion (March 31, 2014).
• Financial Strength Ratings* for Western & Southern's six life insurance
subsidiaries.
• AM Best – A+ Superior
• Standard & Poor’s – AA Very Strong
• Fitch – AA Very Strong
• Moody’s – Aa3 Excellent
The Challenge
 Change in team members and expectations

• Aging workforce - knowledge Gaps in the business and the need for
knowledge transfer
• Associate Engagement in the business (Career vs. Job)
 The Speed of Change

• Changes in processes, people, technologies
 Regulation
• Disclosure changes
• Statutory and Federal regulation
Timeline and Implementation Strategy
 Standardize Components of Financial Accounting and Reporting

across Insurance Companies
 Build relationships and gain buy in through improvement

opportunities in business units (Reconciliation Implementation)
• Enhance Control Structure
 Leverage technology to improve financial reporting and enhance

team member flexibility and knowledge (Close Implementation)
• Drive Financial Reporting efficiencies in direct business partner processes
 Efficiently monitor and test on-going control structure

• Leverage technology eliminate data gathering and testing redundancies
Recon Implementation Objectives and Results
Preliminary State of Reconciliations

•Manage reconciliations across approximately 14 business units
•Execute approximately 1000 monthly reconciliations (1800 quarterly)
•Reconciliation process was extremely manual and not scalable
Update Reconciliation Result

•Standardized, scalable process implemented within 4 mos.
•ReconNET Efficiency Results
Rec. Type # of trans Ave. Mo. Ave. Mo.
level recons Transaction Match %
s
Bank/Susp. ~50 dly/wkly ~130k ~80%
•Standardized Management Reporting
•Standard measurable metrics to reduce risk of inaccurate financial reporting
Benefits for Corporate Accounting
 Process Enhancements
• Creation of enhanced monitoring and communication control
structure
• Eliminate redundant control execution and testing
• Elimination of wire account validation process due to more
timely reconciliation execution
• Drive Management and Business Partners to Action

• Create account reconciliation execution accountability and provide
visibility and transparency to business unit senior management
• Develop specialized teams responsible for reconciliation, root
cause analysis, and process improvement.
Close Enhancement Project
 Close Overview
• Approximately 30 individuals directly managing close activities
• Manage the close and consolidation for six insurance entities and multiple
non-life insurance entities.
• Initial process was manually intensive and managed through individual
spreadsheets and checklists for each entity.
• Initial State of the Close Process

• Limit direct management oversight into real-time close status
• Lack of visibility into true status of close completeness
• Many business partners do not understand important of task timing or level of
urgency related to close tasks.
• Inefficient process to monitor process enhancements or roadblocks
Accountability and Education
 Accountability  Education
• Goals and development • All tasks have description
plans including objective of the
• All users can see status of task
the monthly close • Detailed instruction and
• Monthly reporting on the reference materials to
status of close tasks and allow for transferability
late tasks • Tasks to track analysis
• Daily coordination and issues and procedural
escalation of late tasks changes
• Engagement in
management tasks
Close Results
 Process Replacement
• Approximately 2000 tasks added in first six months
• Replacement of all checklist related activities involved in close
• Installation for entirety of Comptroller’s Department (Acct, FR, Inv.)
 Management Engagement and Transparency

• Improved discipline related to communication of non-routine items
• Improved flexibility through Co-management of team member inboxes and responsibilities to ensure
appropriate prioritization (leverage queues)
 Manage by Exception
• Escalation of late tasks to management responsible for function
• Reconciliation Monitoring at an aggregate risk level
• Close Enhancements
• Improved timing and completeness of close
• Enhanced accountability in operational areas related to financial reporting responsibilities
• Better leverage accounting resources to analyze data vs. routine non-complex task execution.
Enhanced Compliance through Close
Standardization
 Aligns to our MAR Strategy

• Partnership between Comptroller and all business units
• Similar user base to share ownership and responsibility.
• Leverage ease of use and understanding from other products
• Expect to eliminate approximately 1000 hours of redundant and
administrative efforts.
• Align close task execution that impact financial reporting to compliance
related controls.
• Control Savvy Management Team

• Challenge and Develop Talent to not only own and understand tasks,
but also control environment
• “It’s Good Business”
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IASA 86TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Sap R2P

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Reinventing Record to Report For

IASA 86TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

• Syril Mathai, CPA

• Focus relentlessly on driving Process Simplification & Standardization

• Invest in Integrated Close to differentiate from peers relative to business

• Broad organizational value (through reliable information and business

• Integrated Systems & Single version-of-the-truth are critical to success

• All Top Performing R2R organizations leverage technology extensively

“Our goal is to remain on the constant improvement curve

“What I do not know (unknown risk) and lack of communication

“Risks of things falling through the cracks as things are handed

“Changing regulatory environment”

Evaluating Record-to-Report risk & performance:

• Are we doing the “right things” – in the

• Are we “doing things right?”

The first, unified financial governance

MANAGES ALL GENERAL LEDGER

 Full awareness of required activities within

Cadency reinvents, transforms and

Improved Compliance through an

• Wade M. Fugate, CPA

– Ernst & Young LLP

 Change in team members and expectations

 The Speed of Change

 Standardize Components of Financial Accounting and Reporting

 Build relationships and gain buy in through improvement

 Leverage technology to improve financial reporting and enhance

 Efficiently monitor and test on-going control structure

Preliminary State of Reconciliations

Update Reconciliation Result

• Drive Management and Business Partners to Action

• Initial State of the Close Process

 Management Engagement and Transparency

 Aligns to our MAR Strategy

• Control Savvy Management Team

IASA 86TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

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