Financial Close and Reporting

Mariana R C Costa:

Hello everyone. Good morning. Thanks for calling the session. I know it’s a little bit cold today. It’s not easy. So, I am Brazilian but I’m working in Uruguay now because Syngenta has our financial center operations in Uruguay. And now we will speak a little bit about our challenges and tips for month-end closing. I hope you’ll enjoy the session.

Mariana R C Costa:

So here we’re going to talk about a high level of how it has its financial closing at Syngenta. Some challenges and concerns that I believe it’s common for whole companies, and some business intelligence tools are there enough or not for our process and to support us with the monthly and key requirements from technology.

Mariana R C Costa:

So, our financial closing and Syngenta. I believe that it’s similar to other companies, we use SAP for the whole company. And we know that SAP is not friendly for most of the people. And we are trying, we try to customize it to some things, but it’s not good to customize it a lot, because every time that SAP releases a new version, it’s more difficult when you have a lot of customization. So when you have to do the month-end and we have a lot of reports to prepare. So, we have some account reconciliations to do before the monthly calls. We have that provision analysis. We have an aging analysis. And we also have more reports that we have to consolidate with the accountant with the Treasury, and I promise in the b2b area. So, and everyone is working, they’re closing. So it is difficult to consolidate everything. So we have to generate a lot of databases from SAP. It is pretty difficult to work in Excel because, for example, in Brazil, our database is too big. For some small countries, it’s easier. But for Brazil it’s too big, it’s really difficult to work with Excel.

Mariana R C Costa:

And also we have to verify the data to check if these reports are correct or not, before sending them to the headquarter. And for sure, we have almost 4000 customers in Brazil. So it’s impossible to verify everything one by one. And we have about 6000 lines in the whole account receivables in our database.

Mariana R C Costa:

So we used to check the biggest one. The sums that we are having in our mind, that we know the customer very well. We just wanted to make sure that the data is alright. But, the main point is we have a lot of reports. The deadline is very short. So we need to check with other areas if they’re already finished. They just mentally inspect our area and make these adjustments manually before it is sent to the global to consolidate all the information. So, our biggest concern with month-end financial closing, it’s related to, we need to trust the database, we need to make sure that all the information that we’re sending to the headquarter is correct. And we have to do a lot of manual work in this database. So we need to guarantee that everything’s fine. My team used to work overtime to finish all the processes, all the math, all the reports. And for sure we are trying to automate some processes etc so we can reduce this time that they are working to finish all the process.

Mariana R C Costa:

And up to now, is to have to generate all the reports in spreadsheets. So it’s difficult to depend on Excel because sometimes it will have an arrow, you have to be careful with your formulas. And if you have on the first day of the month, if you have all the reports ready, the second day someone adjusted, you have to redo all the reports from the beginning. So, we are trying to coordinate all this process between all areas to guarantee that the process will be easier for everyone, and we will have the correct number at the end of the month.

Mariana R C Costa:

So, the good and bad news here, It seems that the bad news is, almost all the companies have the same problem and have the same issues with that. Everyone is concerned to send the correct information, everyone feels pressure under pressure to finish on time. And we still have to be able to send the reports and check the information. Normally, we have to consolidate information from other systems from multiple systems. We are trying to have almost everything in SAP, but for sure we have. And it’s common in a lot of companies not just in Syngenta but to have Salesforce, we have Biller direct for the customer, etc. And sometimes we’ll have to consolidate the information from different systems and share the costs of the resource. And because they need to work extra time it’s very difficult.

Mariana R C Costa:

In the good news: You are not alone. So, we are not alone. We all have the same problem. And maybe it’s good for us to share information to share the best ideas, best practices, etc. And maybe we find that common process so that we can make our process better. So what we are doing in Syngenta, this financial center, is trying to standardize the process across the country. It’s not easy because we have some particularities in Brazil, in Argentina, that is different from the whole America, Latin America and different from the United States for sure. But when we have everyone together in the same office, it is easier to share these ideas to make some continuous improvement process sessions.

Speaker:

Yes, sir.

Audience:

Where is the data from? Is it like an internal survey that you did?

Mariana R C Costa:

We made the research here, let me check. It’s a little bit more. So it was adre-match or workitup.com. Okay, but I can share the presentation later. Okay.

Mariana R C Costa:

So talking about challenges and concerns, it’s no different from what I am talking about. Now, mainly in my specific situation, we receive 50% of our payments in the last two days of the month. And before we apply this cash, we need to contact the customer, sales team, credit collection teams and align with everyone whether we can apply the cash or not. Some customers send this information before they make the payments, but most of them don’t do that. So we have two days to apply 50% of the cash of the month before the end of the month, and then we have two days at the beginning of the month to consolidate into old reports to the month-end.

Mariana R C Costa:

So this is an issue because sometimes we don’t have time to apply everything. In Syngenta, we cannot apply the cash before the customer center. Okay. So imagine a 50% of the amount, and it’s okay in some months we don’t receive a lot, but in months that we have the big receivables, that we have around four or five months in the year, produces a huge amount of money. It’s very crazy and we have to work hard, and we still have the deadline related to time because the time is according to the headquarter in Switzerland. And we are in Latin America so we have time differences etc and we have to respect that on the system.

Mariana R C Costa:

We have this own database, that generates manually where you have to track the unit, find the payment, generate the reports, talk to the customer, apply the cash, align with all teams involved in the process. And then as I told you we have a high volume and because they have account receivables of Syngenta Brazil (just Brazil), it’s around 6000 lines in the spreadsheet. So it’s too much that you have to remind him to not manipulate the work on the information and prepare the reports etc. So it’s something very difficult and sometimes we have problems with Excel and decide to redo it over again. And it takes time. In months like January, February, it’s easy but in May, April, it’s more complicated for us. So, we have to consolidate multiple information from different systems or different people.

Mariana R C Costa:

It’s okay, do you want to ask something? No? Okay.

Mariana R C Costa:

So, you have to align all the information before we finish the whole process and cash application in the reports for the month. And this is another difficult process that we have to collaborate with and verify the data. And we have cash allocation and account receivables in Uruguay and they still have credit and collections in Brazil.

Mariana R C Costa:

And this sales team is already in Brazil also, so we have to contact them to make sure that all the information is okay. Mainly by that provision, we have to contact the manager of collections, to make sure that he’s aligned with the whole information because we have some negotiations with the customer, that we will consider whether the whole amount is a better provision, or not. Because if they have some negotiation, some guarantees, maybe we can make some considerations in their reports. So we need to prepare the reports on the first day, on the second day in the morning, align all the information and then finish until the end of the day, respective the time from the headquarter.

Mariana R C Costa:

So when generating those reports in spreadsheets, it is always difficult. You should be careful with formulas. And every time that we are taking something from the spreadsheet and it’s very quick to make sure that we won’t lose information and we would not have to start from the beginning again. So when you have this manual information, we don’t have a lot of flexibility to change the information in the system. So we have to extract everything and export everything from Excel. So we have to work on excel in preparing and we also have a template that we have to send to the headquarters.

Mariana R C Costa:

So every country needs to send the same template. So we needed to first work with the spreadsheet and then move to this template. And when we moved to this template, it’s also manual so we had to be careful that the information is not in the wrong line meaning aging or BDDP better provision to make sure that you’re sending the right information.

Mariana R C Costa:

So it will be good for us to have a business intelligence tool. So we implemented a business intelligence tool that could help us with the reports. But the main point is, it works at a certain momentum that you can generate the database. There was a whole process where we had to align the information before their teams with the customer, etc. and put some comments in the spreadsheet before it was sent to the headquarter. We needed to do it manually. So, we still don’t have a tool that will generate and do all the reports 100% automatically. We still have a lot of manual work to do. But we are improving with the process considering that we still don’t need to retract the database from SAP, but from this business to that, it’s faster than SAP.

Mariana R C Costa:

And here is a question: Is business intelligence tools enough for us? In my experience, I have worked with business intelligence in two companies, two different companies. I noticed that they are not enough for a hundred percent of their reports, but it could help because it’s much better if you can extract the database from business intelligence to them from SAP and start from the beginning in Excel.

Mariana R C Costa:

But sometimes the headquarter is requesting information before our deadline so we need to prepare in the old fashioned way. We need to know how to do it from the beginning. And something that I already talked to my teammates, if you know how to do it in the worst way, you want to know if the business tool is not correct. So, if you just have the business intelligence tool you won’t be sure if the information is right or not or if you have a mistake in this report. We won’t find this mistake, you’re probably reported wrong. So it’s something that I think that it’s a very common problem for all companies. We have a lot of systems disconnecting them, even if you use SAP and you have everything they say, used to have parallel systems to work on, on reports, etc. Sorry.

Mariana R C Costa:

And we need to do all this process manually and generic, a lot of databases consolidating the information. We have to talk to accountants, we have to talk to credit and collections accounts receivables, account payables, Treasury, etc. Before we prepare the reports we have to do the constellation sign the system and make sure to be zero in them, at the month. So the good idea is to have a tool that could generate all this report, automatically. But I think that we need a tool where we have a big database, and it’s available for everyone. And then you customize your reports because each company works in a different way each company requires information differently. A company from Switzerland requires some information, an American company requires another information.

Mariana R C Costa:

So for me, it’s better if you can customize a little bit. It seems that all business intelligence tools have some new reports so we cannot customize a little bit that’s why I think that they never support 100% of our needs. And this takes too much time to work on. Sometimes we spend around three or four hours just to generate the reports. It takes so much time just to do the month-end. And because of that, we have to store the information and consolidate everything and check. And it requires a lot of manual work, and you have to be sure that the data is correct.

Mariana R C Costa:

So, as I said, I think that we should have a business tool that integrates all the information that we need to do their reports and the month-end should be integrated with SAP. And I have a business tool that is just updated once a day. So it does not work for me, because I need something that updates online. And it’s very difficult for us to use this business intelligence to, in some cases, we can use these reports in another case when I have to generate manually from my SAP because it’s not updated online.

Mariana R C Costa:

We should have a single resource to have all the global visibility in, and also considering that sometimes we work with the same information from different areas. And we have a part of this part of the team in Brazil and part of the team in Huawei, you have to prepare reports when you’re crossing information their numbers are not much never met the different size small but it should be the same if we’re using the same database, it should be the same doesn’t make sense. And for me is that we have a single big database with business intelligence so that you just customize your information, you can be old if everyone in the company can have the same information.

Mariana R C Costa:

You don’t need to check the information with other areas and try to find the mistakes. We just need to have it in the same to me as something that we’re still working on, and trying to standardize the process. And, and for sure it’s much better for us even if the headquarter wants to check information from Brazil, and they can, they should be able to check the system, and in and see the information there the real information they know not to check off the team in Brazil, lead. They just check if the information is correct or not, can I use it and can I not use it. So, it’ll be good, not just for our process but also to make decisions, etc. So this automatically reports and then generates a period of data that we still don’t have to just update once a day. And it’s possible to customize to make some adjustments as I said, we have a business and agribusiness in Brazil is very big. We have a huge amount and have a high risk of credit so we need to deal with a lot of information. We have some operations to reduce the spread to risk.

Mariana R C Costa:

And that we have a lot of negotiations with the customer. And before we set the customer to mend their provision we need to make sure that this customer won’t pay and to have a negotiation etc. And so every business needs some ability to customize because we have specific situations for each business and I’ve already worked with retail and retail is different from agribusiness because the payment condition is short, and in our business is long term. So why receive retail with 30 days 60 days 90 days in our business? 90 days is my short term payment.

Mariana R C Costa:

If I receive them normally I receive them in 300 days, and I have some cash in advance. Some complaints from the customer to pay cash in advance for us to reduce this are long term receivables. But I can go to around 50%, 6% pay with 300 days in our business so we need to be very careful with credit analysis. We need to plan out our collections very well. And sometimes we need to make sure that we prepare some campaigns to make the customer pay before the deadline. The due date. And so let’s see it I think that this system that could support us with the reports will help us, not just in the month-end closing report, but also to make some decisions faster and to control the data. much better.

Mariana R C Costa:

So, and this is it’s very difficult to have a hundred percent of automation and customization. But as I said, if we can improve a little bit. Now I have 50% but if I can reach 100% it will be a dream. But every time that we’re trying to optimize the process and their reports, I always say to my team that we don’t need to focus on the hundred percent. If you have a hundred percent monthly-end and it can optimize 30%, we are moving forward too so we are improving our process. If you can reach a hundred percent automation and customization will be perfect, but if you can reach 30%, 50% or 70% you can help us to reduce our workload and help us to check all the information if it’s correct or not.

Mariana R C Costa:

So, but it needs customization that we have on hand yet, but we are working on that. And automatize to have the reports automatically. So we, as I said, have better visibility about the information occurrence of the database and they were all the reports that we are saying, We will not reduce the human on this dependency and reduce errors in the system. And we’re going to make sure that we send the correct information for our headquarters. It’s okay guys that’s it, you have any questions, any comments or anyone wants to share any and best practices that you have in your company or concerns. No, it’s fine. Yeah. You are not alone, as I said, the good news here is not alone.

Audience:

Did I miss the business intelligence tool that you’re using? Is it by HighRadius or?

Mariana R C Costa:

No, not yet. We are prospects of HighRadius, we are using another business intelligence from SAP. But as I said, it doesn’t help with everything that you need is not enough for our system, our process is from SAP to be who does it calls the name. It’s from SAP news. Yes. And it’s a tool from SAP, but it’s very restricted. It’s difficult to customize a lot of information. So we have some reports that we could create. But as I said, it’s just an update to one Sunday.

Mariana R C Costa:

And for me, it’s not enough because I receive a lot of payments every day, and I have this huge amount of receivables at the end of the month. At the beginning of the month, we still have made it. The accountant is still making some adjustments in the SAP. So I need the report and I can use it because it’s not enough so everything SAP is difficult to customize. So we are prospective horizons because of network something that we can customize a little bit more. I used HighRadius in another company’s previous company that I work for. And now we are prospecting them for cash applications too, and for business intelligence too. Yeah.

Mariana R C Costa:

Sorry, you know, using a trending tag.

Mariana R C Costa:

No, not yet.

Mariana R C Costa:

Yes SAP, but to have a huge project to a huge project in Asia and to digitalize, a lot of things automatize a lot of things. And we are in this financial center operations and to have all the financial team there. So we are working together to summarize the process to automate and bring new solutions that could help us to do the preferred information faster to send the headquarters. And the good news that we are attending for the whole of America, we are obtaining for the whole of America.

Mariana R C Costa:

So it’s become easier because you have everyone there in the same office and we are discussing not just Brazil, but all the countries and trying to get some ideas from one country to another. What is still difficult for example, with some countries that the customer pays with checks and they send this check to the salesperson they will deposit this check in the bank of failure.

Mariana R C Costa:

One week later so we have a lot of things to work on, not just inside but outside this customer, and there are more challenges in some countries and another not so much earlier, despite the statistics that many companies have a struggle with their time to close.

Audience:

Did you say what you’re trying to close this currently and what you’re aiming for?

Mariana R C Costa:

Sorry, I don’t understand the question. What is your time to close Do you know without an hour that the line is two days, the first two days of the month, or conveys, but it depends on the month, if you have, as I said, we have a cycle in our business that I don’t receive a lot of payments every month? I have concentrated payments in four or five months of the year.

Mariana R C Costa:

So, during this month. I used to work much more than others. Because the database is bigger than the amount of receivables is bigger, so I need more time to work on that. But for the rest of the year. In another month, other months I can do it a little bit faster, but because of the volume that we have in our business to have this concentration is specific amounts that they paid, because of the season.

Mariana R C Costa:

And this month we used to work hard. Because of that, but our deadline is we need to apply all the cash until the last day of the month. On the first day, we have two hours just to finish some adjustments. And then in the middle of the first day, we start to prepare the reports, but other areas and still have time to make some adjustments in the system. And we have to deliver all the reports on the second day.

Mariana R C Costa:

So, with everything right or not we have to deliver so we used to work hard to make sure that we deliver on time. And sometimes we have issues, mailing the end of the year. It’s complicated, but we work together just to make sure that we, everyone, can finish all the reports on the second day of the month. On some days and some months, it’s not easy.

Mariana R C Costa:

Yes, we want to have the deadline of the headquarters and we have to close the system at a certain moment and open the system again so you cannot wait too long to do that in some month, everything’s going fine. We do their purchase and can deliver that month-end. Very well. In some months you have to redo it again that they report to Atlanta, check all the information. And we still have a part of the team in India. So we have a different time. And we need to check if they’re finished their adjustments or not, etc. So, we still need to depend on a lot of communication between the teams.

Mariana R C Costa:

So that’s it.

Mariana R C Costa:

No problem.

Audience:

You mentioned earlier that you’re working at standardizing your processes. I know that’s a struggle. Is there any comments or that you have there in terms of what you’re doing to standardize the process to the additional.

Mariana R C Costa:

Now we’re still working on that, my point of view is. If you’ll see the big picture, the process is the same for the whole country, it’s almost the same but when you want to get the details of each country, you say that to be different you have to manage that. In some countries, it requires more customization than another one. But we still have this goal in Syngenta that we have to standardize as much as we can. And then some countries that require more customization we’re gonna work on. But trying to limit not just do everything that we need there because, as much as you customize the system. It’s more difficult to control when SAP updates the system when you have to control when people change and depend on multiple people. And we need to try to optimize as much as we can but if you want to automatize for sure when it’s supposed to customize a little bit, but I am looking for how America, and I am focused on Latin America because the United States, it’s very already automatized. And, but in Latin America, we know we have a lot of differences from one country to another.

Mariana R C Costa:

And the most complicated one is the ones in Brazil and Argentina. The other ones we see that have the same process, the difficulties, for example, Empire-wide that the customer 95% of the customer may wish to check in which is not good for us because it takes too many days to process the payment in the system. And we need to guarantee that to have everything this month. So to finish the whole process and constellation. But it’s difficult for the customer we’re talking about when we made a campaign in 2015 to the customer that I will give you a discount if you pay through banking transfer. And he, they refuse it, they prefer to pay with checks so it’s difficult to convince them in Brazil.

Mariana R C Costa:

It’s fine because most of the customers pay with a transfer, the banking transfer or boletos that it’s a tool that just has for Brazil, but within fine apply automatically. So we don’t have a problem identifying the payment and. Sorry. We just have our problem to resist the volume of work. And in Argentina, for example, we have the difference between the currents, because you have contracts in dollar contracts in phase Argentina, and they in the customer sometimes say that their currencies are better for me today’s they will pay today. But then the due date of the invoice is not today’s and then next week so we have to consolidate this difference. And it’s very complicated, but the rest of the country. It seems that your customer has to invoice they will make 10 payments. With this just the same amount, or sometimes he paid less but because he will receive a credit note. And, the problem is we have the account receivables, we have the cash application, and we have another system to check the disputes. And have to extract a report from everything to check on the information across the information to make sure why the customer paid this invoice less. And we have to have all this information by the end of the month.

Mariana R C Costa:

And it’s very common for almost all customers in all countries to pay, the last of the month, the last two days of the month. As I said in Brazil, 50% to 6% of the payments are done in the last two days. But we are working on that basically if you see the big picture, the processes are the same. But when getting the details of each country. Sometimes we can change the process, sometimes not. If I depend on the customer it is more difficult. If I can change something, the internal is easier. Well, we are doing a lot of sessions about that to continuously improve and standardize to automatize. We have a lot of new projects in the sessions that we’re working on. No problem. Thank you.