- May 4, 2016
- Posted by: platformspecialists
- Category: FCM, Financial Consolidation & Close, Hyperion EPM
I’ve heard all this chatter about FCM but what is Financial Close Manager (FCM) and what does it do?
Let’s start with the basics; what the heck is a financial close!? Loosely defined, it’s the process of closing your books at the end of each reporting period (Month/Qtr/Year). This may entail a series of pre-defined processes such as reviewing the trial balance, reconciling Intercompany items, sending countless emails to everyone (oh the emails), etc, etc. FCM is a great tool to help to manage all of these processes and provide visibility into bottlenecks.
Don’t just take our word for it. We’ll quote Oracle as if it were Webster’s dictionary: FCM is defined as a tool that helps you outline, execute, and report on the interdependent activities of a period. It’s a centralized monitoring tool that helps you streamline your close and provide visibility when something has gone wrong. Rather than emails being in one person’s inbox, FCM stores all of the close items so it’s easy to understand which part of the close process is taking longer than it should, parts that miss the most cut-off days/times, and who’s not doing their job.
It’s the ultimate finger-pointing tool! (Just kidding, but it does help see where issues are)
That’s great, I can read the admin guide too but how does it work?
FCM is customized to a company’s close process, so no two FCM setups are identical in nature. While there is flexibility, FCM setup should mirror your other applications (HFM or other) in regards to Years and Periods. It also takes into consideration company holidays and can use business day layouts as needed. This allows users to create close templates that are valid across applications involved in the close (HFM, Planning, etc). Each template is made up of a series of tasks that need to be completed as part of the close being performed.
An unlimited number of close templates allow you to create one for monthly reporting, statutory requirements, and shareholder filings; the options are endless. Just think, you could even create a close template for all of the office parties since you’ll have so much more time on your hands.
In regards to an FCM implementation, let’s think of the close process as a series of tasks that need to be completed in order to file and report on monthly financials. Some tasks rely on others to be completed (Predecessor tasks as FCM calls them) while others can be completed days before they need to be completed (Start Early tasks). Tasks should be created in a hierarchical fashion just as you would create dimensions within an HFM application and/or a Planning cube.
Think of tasks as your metadata and appropriately group them, assign them and schedule them. Daily tasks should be broken out individually by assignee and can also have a backup (the next person to point a finger at if incomplete). See the below screenshot of a close template that can be loaded into FCM. The user Jdough will be notified on day 2 that they need to run the AR/AP Intercompany (IC) report. They have until day 4 at noon to complete this or it’s late. This task type may also require them to submit documents and/or any out-of-balance that exists after review.
Once you’ve defined all of your tasks, you now need task types. Task Types, what are those!?!?! Task Types are easy ways to group all of the financial close tasks within your new build. FCM comes with two out-of-the-box (OOB) task types “Basic” and “Parent,” neither of which is pre-defined for parameters, instructions, questions, etc. However, when creating parent members the parent task type needs to be used.
Basic task types can be customized as needed. For instance, a basic task type can be created to “request a document.” Close tasks that require an end user to “request a document”as part of an overall deliverable would be labeled with this specific task type. Task Types can also have specific parameters, embedded instructions and forms that end users need to fill out. Since these are common and reoccur over and over, it’s best practice to create them once and assign as needed.
Now that you’re an expert and you’ve removed your training wheels, you can now start setting up Integration task types. Integration tasks allow you to do things like:
- Consolidate data – (Automatically – similar to task flows if you use them)
- Bring you to the journals module
- Bring you to a specific Data Grid/Form
- Extract data to a file (Automatically)
These are built into the tool, so don’t panic! You’ll notice in the screenshot below an example of some of the integrations with HFM. FCM has the ability to integrate with other Hyperion products but you’ll need to review the admin guide to determine if your product is compatible.
Those integration types that are “Automated” execution types can be setup to run month over month to complete tasks at given times without user input. A common automated task is to run a consolidation in HFM. FCM can be setup to consolidate data on the hour, every hour for the duration of your close. Once complete (if setup) a list of users can receive an email that the consolidation is complete.
The “End User” execution types are a short cut to point users to specific application tasks like linkages to the journals module, data grids, data forms, etc in HFM workspace. Just another opportunity the tool offers to minimize close time and enjoy some much deserved relaxing.
Automatic emails may be one of the biggest perks of FCM throughout the close process. As mentioned earlier, the tasks should be set up hierarchically in the order in which they should be completed by day and time. This includes a Start and End date and time. It’s important to set this up properly as once the monthly close template is scheduled, each user will get a flood of emails saying the close period has begun. They’ll also receive various emails for each of the tasks they are assigned to complete and/or the tasks they own (for managers).
Users will get emails as frequently as every two hours (determined by the users) reminding them that their task needs to be completed (careful this can be set to never!).
Oracle has gone so far that FCM even adjusts itself by time zone so emails are sent appropriately to each end user by location of origin! With such frequencies and precision of emails to users and managers, if a deadline is missed, well then there’s just no excuse.
Even better, a user can see all close tasks in a Dashboard, Calendar and/or Gantt chart view – for those of us that like picture books to tell us the whole story.
Notice the Task Status, which shows the manager what needs attention, is pending, etc.
Now that you know what FCM actually is, let’s recap the real value.
If you’ve ever been part of a close process, you know there is a lot to manage and remember. Let’s summarize the benefits of FCM:
- Give people involved in the close a task list to easily manage their portions of the close
- Run repeated automated processes during the close
- Notify those involved in the close as to what needs to be done and when things get completed
- Gain insight into which portions of the close take longer than expected and potentially address them for next close cycle
- The flexibility to adjust your close template (tasks) month over month as you find and resolve issues in your process. You can:
- Scrap entire templates with no repercussions (unlike an HFM application)
- Delete 1000 entries that you determine unnecessary with ease
- Add 1000 entries that you missed on the first template
- Change Owners and assignees across multiple tasks at once
- As a manager, you can easily identify bottlenecks throughout the close through daily monitoring of your Dashboard.
- A record of each financial close that’s stored directly in FCM.
Remember tasks are setup based on YOUR company needs. You get what you put in and the more time you take thinking through the close process in regards to FCM, the better results you’ll get.