Standardizing Financial Reporting

• Challenge: Integrate information systems and financial reporting to ensure revenue from and royalties to licensees could be accurately accounted at global automotive services company after corporate restructuring, relocation of corporate headquarters and loss of key IT staff.
• Solution: Deploy FTI Corporate Finance and FTI Technology professionals to develop an automated financial reporting infrastructure with standardized IT processes that could be implemented on a global scale.
• Results: In less than two months, the FTI teams helped the company to transform millions of licensee transactions into a systemized and electronic reporting process.

Situation
Because of significant corporate restructuring and growth by acquisition, the executive team at a global automotive services company found itself facing a complicated IT challenge. The individually acquired businesses operated on different IT platforms and used disparate financial reporting systems. A corporate mandate was issued to integrate this technology infrastructure and inconsistent financial reporting processes into a single, global financial data processing and reporting environment.

The company’s inconsistent data systems and financial reporting processes were quickly creating serious challenges to operations and management. There were questions about the accuracy of licensees’ reporting of revenues, royalties and commissions for hundreds of local and international operations.

Two operational developments complicated the project to align the systems and procedures: the corporate headquarters relocated to a new city; and a number of IT staff members left the organization during the transition. The result of the move and turnover of key staff members was the loss of important institutional knowledge behind the creation of the current information systems that drove the company’s revenue, billing and reservation system processes.

The company was faced with an immediate and critical business challenge: to quickly standardize disparate financial processes across a myriad of technology platforms, to establish a streamlined and precise reporting system, and to engage multiple levels of executive and management stakeholders within the company to build an integrated solution.

FTI was engaged to provide strategic consulting services for a number of projects related to the streamlining of information systems and financial reporting.

Solution
FTI devised new, more efficient processes based on these system tests to ensure that accurate data was passed back and forth from the licensees at the local level to the IT and Finance groups at the corporate office.

The fast work and successful outcome of this initial project led to a second, far more ambitious assignment for FTI. The company retained FTI to develop an automated financial reporting infrastructure with standardized IT processes that could be implemented on a global scale. Leveraging its deep knowledge of financial and information technology systems, the FTI team aggressively moved in to assess the challenge. They learned quickly that the problems ranged from the fallout of the relocation of the corporate headquarters and the departure of several key IT professionals to a legacy information system that required manual input of crucial financial data (e.g., billing, A/P, A/R, tax collections, and so forth).

The FTI team worked with a number of disparate groups throughout the company. These groups included the accounting teams at multiple locations around the world, various licensee accounting groups and the collections managers in the corporate accounting unit. FTI’s approach was to develop custom templates and databases that would standardize financial reporting worldwide, then to institute new electronic processes for storing and submitting data. For the first time, retail locations all over the world could systematically report their daily financials, in real-time by using a secure, standardized online platform. This timely and unified sharing of information between remote locations and the corporate office eliminated manual input and re-typing, there by expediting financial reporting and increasing accuracy of data collection.

The Results
In less than two months, the FTI Corporate Finance and Technology teams helped the company to transform millions of licensee transactions into a systemized and electronic reporting process. Each licensee is now able to quickly and accurately report revenue details to the corporate office, restoring the company’s ability to quickly reconcile data and report financials both internally and externally.

Beyond the success of creating reliable and accurate standardized financial reports for the executive team, the company has also realized extraordinary efficiency benefits. As a direct result of FTI’s efforts, the company was able to replace an archaic financial reporting process that consumed two weeks of time for two to three staff members with a streamlined, state-of-the-art process that now takes just one professional roughly 35 minutes to complete.