Trintech: Transforming Financial Processes through Risk Intelligent RPA™

Trintech: Transforming Financial Processes through Risk Intelligent RPA™

Teresa Mackintosh

Trintech Inc., a pioneer of Financial Corporate Performance Management (FCPM) software, combines unmatched technical and financial expertise to create innovative, cloud-based software solutions that deliver world-class financial operations and insights. From high volume transaction matching and streamlining daily operational reconciliations, to automating and managing balance sheet reconciliations, intercompany accounting, journal entries, disclosure and fiduciary reporting and bank fee analysis, to governance, risk and compliance – Cadency® by Trintech manages all aspects of the financial close process. Over 3,500 clients worldwide – including the majority of the Fortune 100 – rely on the company’s cloud-based software to continuously improve the efficiency, reliability, and strategic insights of their financial operations.

 

One Global System of Financial Controls

As organizations begin to take the initial step towards automation, many often look to the basic core processes of a Record to Report workflow: account reconciliation, journal entry adjustments and close workflow management. Although each of these processes are critical to the financial close, especially with account reconciliations considered the largest control for most companies, one major component is still missing – compliance. Cadency provides a verifiable and permanent record of your System of Financial Controls, as defined by your compliance framework, including; what they are, when they are run, their results and any remediation required when a control fails. By utilizing a System of Financial Controls that enables integration with any System of Record (ERP, treasury, tax, etc.), all controls in your office of finance are in scope, auditable and reportable. This provides the ability to identify opportunities to remove the bottlenecks in the process when the path of effectiveness or efficiency are impacted.

 

Transforming the Financial Close with Risk Intelligent RPA

At Trintech, we operate under the firm belief that within the finance and accounting process, risk informs everything. Risk drives how much resource a user applies to an event or issue. In the same way, risk should be central to how we automate and ensure behavior outcome. To put it simply and within the Record to Report context, the company advises to use risk to process automation through Risk Intelligent RPA (RI RPA) and drive teams to focus on areas that represent a higher risk to the organization when it comes to creating confidence in their financial reporting. RI RPA allows organizations to configure RPA to the unique requirements large enterprises demand rather than a one-size-fits-all mentality others provide. Organizations should utilize automation, namely RI RPA, to point the team where they should be focused with their high-value human resources – focusing efforts that will increase the integrity and ultimately the confidence in the company’s financials as a reporting organization.

One client of Trintech that took these steps, flipped the process on its head after realizing 93% of the balance sheet accounts, which only accounted for 6% of the balance sheet, was where they tended to spend most of their effort. So, they refocused from applying effort everywhere to only focusing on the 7% of balance sheet accounts that exposed the organization to the most risk and automated the rest. RI RPA is the key to this transformation as it utilizes the customers’ compliance and risk profile to identify the work which requires human engagement and automates that which can be based on their risk/compliance profile.

 

Aiding Integration and Interaction with Automation

Trintech uses RI RPA to ensure key controls can integrate and interact with one another. As an example, a GL account reconciliation is a key control to validate a user’s balance sheet. As a part of performing that key control, users might identify adjusting items. If a user just stops the process there, the company isn’t going to produce reliable financials because it hasn’t addressed those risks. By utilizing a System of Financial Controls, a user can take those adjusting items (the risk) and populate a Journal Entry voucher. That Journal Entry voucher will collect the information, validate it (is it compliant with the System of Record?), put it through an approval workflow and post those correcting entries back into the System of Record (ERP). It will then close those reconciling items out and then realign the financial statements. So, these two key controls, the interactions between the GL reconciliations and the journal entries, ensures that the user has an auditable, traceable activity trail. So, when it comes to their auditors, they can form an ad-hoc judgmental journal that can be posted back to the source.

Cadency has built up large datasets on how users execute their System of Financial Controls and can compare them to the compliance framework which documents the risk profile. This means Cadency knows:

  • How often the team approves GL reconciliations, journal entries and close tasks on a single day in the close cycle (n-5, n-1, n+10, etc.)
  • How this varies by each person on the team
  • How this varies by the materiality of the item (journal entry value, type, etc.)
  • How this varies in comparison to the risk profile the user has set in their compliance framework

Cadency is developing Financial Controls Artificial Intelligence which studies the trends in data over time to profile them and identify normalities (clusters of data points that look the same) and abnormalities or risks (data points that stand out) over time. For example, a user has 20 journal entries that are auto-approved each n-5 day in their financial close and 3 which are manually approved above $100,000. These patterns and the supporting AI algorithms then examine items in the next close and look for alignment (low risk) and differences (high risk) and are then flagged by their risk profile in Cadency.

 

Improving the Efficiency and Effectiveness for Futuristic Market

According to Gartner, intelligent applications are the next battleground for enterprise software. Since disruptive technologies have become the backbone of every business, and intelligence and innovation drives the success and efficiency of the business, intelligence should be at the core of all digital business applications. With ML and AI, Trintech will continue to improve efficiency and effectiveness, reduce cost and risk all in the goal of enabling the user to produce non-re-stateable financial reports. The company is excited to be bringing this innovation to market in a way that leverages the customers’ System of Record (ERP system) and their System of Financial Controls (Cadency) to drive unique value to their organization.

 

Awards and Recognitions

Trintech has been recognized as One of the 25 Hottest Fintech Companies by APAC CIO Outlook Magazine.

Additionally, Trintech is named One of the Fastest Growing Robotic Technology Solution Providers to Watch by Technology Headlines Magazine.

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