By Ben Simmons
A rise in merger and acquisition activity is increasingly obscuring firms from important financial information, resulting in poor and often unprofitable decision making, a financial systems expert warns.
Vantage Performance Solutions is warning that more mergers and acquisitions year upon year - an annual increase of 16 from 537 to 564 last year in the UK - means more firms with multiple disparate accounting systems which don’t provide accurate detailed key financial data.
“The economic conditions of recent years have meant that the market has been prime for more mergers and acquisitions in the UK, both by foreign and home-grown companies, and these have often happened quickly with very little planning time for systems integration,” says Gary Leftwich, planning and consolidation consulting manager at Vantage.
“This can create issues around the accessibility, coordination and accuracy of the data held within the multiple legacy financial systems. When firms rapidly grow, taking in multiple sites and operations across borders, they need in-depth visibility of the profitability or otherwise of these business areas to enable agile decision making as well as to report accurately to internal and external stakeholders. Firms struggling to reconcile and make sense of multiple disparate systems are at risk of making decisions ‘blind’ to vital information which could more effectively inform these decisions.
“In order to make the most profitable business decisions, these post acquisition or merger businesses must take immediate action to bring corporate financial data together by implementing integrated, transparent financial systems as part of an enterprise performance management strategy. By standardising processes and visibility of financial data across the entire business, they can report and plan for maximum profitability and minimised risks.”
Vantage Performance Solutions has worked with leading companies across the financial, manufacturing, utilities, transport and energy sectors to help them design and streamline their financial planning, budgeting and forecasting to work more effectively and simply.
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