Seven tips to speed up your month end process
We know finance leaders are faced with various business challenges on a daily basis. Over-reliance on Excel and manual processing leading to mistakes; a lack of real-time performance visibility making reporting tedious and outdated before reports are even complete, keeping abreast of changing laws and regulations to ensure compliance; and even being tech-savvy to avoid cybersecurity vulnerabilities.
Each challenge has a business impact. One critical financial process is the month end close – a process every organisation will be familiar with.
Reconciling accounts, reviewing financial statements and preparing reports can be a time-consuming and tedious task. However, there’s no two ways about it – the monthly process has to be completed. Fortunately, there are ways to streamline and accelerate the close period and make it a far less stressful time.
The length of time it takes to close the books depends on your business, the complexity of your finances and the size of your accounts team. However, the average monthly close cycle takes organisations five to ten days to complete. Whilst the aim is always to close the books as swiftly as possible, corners must not be cut. Mistakes simply can’t be made.
So, why is it that’s closing the books takes so long?
Month-end is a stressful time for finance teams. And the worst part – it comes around quickly.
Unfortunately, accounting teams sometimes lack the organisational efficiency, technology and automation it takes for a straightforward, quick close. And a disorganised monthly closing process takes a toll on budgeting, forecasting and decision-making.
When stakeholders are waiting for information and the pressure is on to deliver, mistakes can be made. If mistakes are identified, more time is spent rectifying. Worse still, if they are not flagged before reports are circulated, inaccurate information will be shared.
Finance leaders want to know; “How do I close the books faster?”
Financial leaders cite one of their top “wants” as closing the books faster. They want to empower the finance team and build inter-team confidence, relinquishing individuals from repetitive clerical tasks to focus on meaningful strategic activities.
In this article we share seven tips to speed up your month-end close, whilst ensuring accuracy in your financial management.
1. Streamline your closing checklist
Having a detailed checklist of tasks to complete during the month end process will ensure you are appropriately organised, know exactly what needs to be completed and that nothing is overlooked.
By having a clear and comprehensive checklist, you will be able to effectively manage your time and resources. Start by identifying all the necessary tasks that need to be completed:
- Reconciling accounts
- Preparing financial statements
- Reviewing budget variances
Breaking each task down further into smaller sub-tasks with specific deadlines for completion will help you stay on track and ensure that all necessary steps completed. Regularly review and update the checklist to reflect any changes or improvements that may arise.
Creating and streamlining a closing checklist will improve your efficiency and accuracy throughout the process.
2. Set clear deadlines
To ensure a smooth month end process, it is essential to establish clear deadlines for each step. All relevant stakeholders such as team members and clients, should be aware of these deadlines, in order to keep everyone accountable and ensure that tasks are completed in a timely manner.
By setting distinct deadlines, you promote a proactive approach and create a sense of urgency towards task completion, ultimately contributing to the overall success of the month end process.
3. Standardise processes
Standardising procedures for each month end task will help eliminate any confusion or duplication of efforts. By establishing a set of standardised steps, everyone involved can easily follow the same process, time can be saved and errors reduced.
With a clear and consistent approach, the entire month end process becomes more streamlined and reliable.
4. Automate repetitive tasks
To streamline your workflow and save valuable time, it is best practice to identify time-consuming and repetitive tasks. These tasks can range from data entry to report generation.
Through the analysis of these tasks, you will be able to determine which can be automated using software or tools. Automation not only reduces manual processing, but also improves productivity and significantly reduces the margin of error.
5. Use technology to your advantage
The month end process can be vastly enhanced by leveraging financial management software, such as Sage Intacct. This advanced technology, which can be seamlessly integrated with other platforms, automates and streamlines various tasks, making them more efficient and less prone to errors.
Organisations that embrace technology achieve greater accuracy and a faster close. They also gain overall improved financial management.
6. Implement a continuous close process
By implementing a continuous close process, the efficiency of your financial procedures can be much improved. Performing certain tasks throughout the month using your financial management software, rather than waiting until the end of the month to start the closing process, allows the workload to be better distributed and reduces the overall time it takes to close the books.
This proactive approach ensures that you are constantly staying on top of your financials, rather than waiting until the end of the month.
7. Review and improve
To optimise and improve month end procedures, regular process reviews are essential. Seek feedback from your team to identify areas where improvements can be made.
Don’t be afraid to try something new. If it doesn’t work out there is always the option to revert back. By embracing feedback, you can streamline and optimise your processes, potentially further enhancing the efficiency of your month end closing process.
Summary
Financial management applications, such as Sage Intacct, can play a major role in expediting your month end process. The software’s advanced automation capabilities can help you eliminate manual tasks, reduce errors and save valuable time.
By leveraging technology, you can streamline your closing checklist, standardise processes and automate repetitive tasks. Implementing a continuous close process and regularly reviewing procedures can further enhance efficiency. And with the right tools and strategies in place, you can significantly accelerate your month end process and improve overall business productivity – without increasing headcount.
If you want to close the books faster, consider the immediate steps you can take and start to make a change. If you are ready to make a more significant change, the implementation of a new finance management system is the route to success.
Close the Books Survey
The results of Sage’s annual ‘Close the Books’ survey have now been released.
The findings of the 2023 survey, where over 1,000 finance professionals shared their best practices on how to achieve a faster and more accurate close, have been collated into a highly insightful eBook.