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How Financial Reporting Software Helps CFOs Manage M&A Activity

How Financial Reporting Software Helps CFOs Manage M&A Activity

The Mergers & Acquisitions (M&A) world is literally white hot. Many organizations, flush with cash heavy balance sheets, are pivoting from their organic growth models to “if you can’t beat ’em, buy ’em” as a strategic shift. Low interest rates and a profusion of cash makes the M&A path quite attractive for many CEOs. In fact, by the end of 2021, global M&A deals could surpass $5 trillion.  Companies are plowing through the uncertainty with a king’s ransom of cash, and the markets are ripe with targets. 

Given the momentum of the corporate shopping spree, many organizations are now suffering from the inevitable hangover of PMI – Post Merger Integration. The reality sets in especially acutely for finance leaders. Leaders are trying to contribute to the purported synergies through adoption of combined teams, and a hastily assembled set of processes and policies. For many CFOs, just getting employees and vendors paid, collecting from customers, and just “not breaking the rules” may be the tactical focus for a “period of time.” Unfortunately, Many CFOs kick the can down the road in dealing with integration of multiple ERP systems – instead allowing the peaceful coexistence of the two – sometimes for several years. Make no mistake, a majority of synergies from mergers cannot be achieved without a fast and accurate reporting of the combined organization.

With CFOs allowing for “peaceful and purposeful coexistence”, many shore up reporting mismatches through massive manual processes – oftentimes committing the ubiquitous sin of using Excel as a reporting tool (see our ebook, The Dark Side of Excel, to learn more about these dangers). This is both risky, and highly inefficient to integrate GL data for one set of reporting within Excel.

When two companies merge, integrating their finance functions is a major imperative for the CFO. Differences in financial procedures can prevent the merged entity’s finance function from effective operations, impacting both external and internal stakeholders. Assimilation of this key function is also time sensitive. Leadership, not to mention investors, demand easy-to-disseminate consolidated financial statements, and forecasts as soon as possible to measure impact and change. A majority of the potential gains from a merger cannot be achieved without committed purposeful and concise financial reporting. Maintaining manually integrated systems limits prospects for future standardization and earnings accretion, thereby preventing expected synergy achievement.

Here at FYIsoft, the DNA of our financial reporting tool was founded to help solve the PMI hangover. Oftentimes, a post-merger entity finds itself strewn with multiple General Ledger systems, disparate Charts of Accounts, multiple legal entities, multiple currencies – and a long, hard path awaiting the CFO.

ReportFYI can handle these challenges, and many more, with single click solutions. Multiple GL consolidations? Bring it on – our reporting tool is GL agnostic. The more the merrier. Different Chart of Accounts? Seamless row definitions can bring it all together for your consolidated reporting needs. Need multi-entity consolidation for many companies and legal entities? ReportFYI eats that challenge for breakfast through one-click/drag-and-drop Organizational Tree flexibility. Different currencies got you down? CurrencyFYI and ReportFYI are perfectly unified to allow multiple currencies and conversions to feed your reporting.

For more information on how FYIsoft can greatly simplify the financial reporting challenges that often accompany M&A activity, schedule a quick demo of our solutions.

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