When it’s the end of the month and your close process is looming, do you often find yourself working extended hours to ensure accuracy and efficiency? If you have the ability to see how you performed only once a financial close is complete, then your next opportunity to see your performance comes a month later when you go through the financial close process again. This is an indication that your close process is more than outdated, it’s also confining.
Some of the setbacks affect your whole finance team, but they especially tie the hands of the decision-makers who use this information to run the company. It doesn’t matter much you prepare in advance, the same issues seem to surface every month as if on cue:
- Tedious manual data entry
- Time-wasting errors from human input
- Missing vouchers, receipts, and other essential documents
- Unidentifiable or unknown payments
- Double entries
- A slew of the same questions from staff members that should know by now
According to Deloitte, too many companies run their close process “by institutional memory rather than clear and specific protocols. Different people involved in the process “just know how things get done”— and have done it that way for years.”
Once you understand how an antiquated financial close process holds your company back, you begin to realize how to fix it, but most finance managers have simply gotten used to an inefficient process.
The reasons most financial closing strategies break down every month?
- No clearly defined close process
- No access to real-time data
- No standardized spending and expense management
- Not enough automation
It doesn’t have to be this way, especially when the technology exists to give you continuous visibility into how you’re performing. That includes a defined process for everything and better management of expense accounts. This way, you have procedures and tools that make closing more efficient (and less error-prone) throughout the company.
Clearly defined close process
Document and track each step of the close process and the tasks required to complete them. Finance leads should assess each task for its value and reason with the understanding that “the way it’s alway been done” is not an excuse.
With the right accounting software, you’re able to automate processes with a clear understanding of dependencies, task duration, and other aspects of the process. Specific team members within the finance department understand their responsibility for completing individual tasks on a deadline for predictable efficiency.
Company stakeholders need to see what’s happening when it happens. For many companies, the finance department’s challenge lies in only having access to accurate information once a month. Unfortunately, business happens the whole month, so company leadership needs real-time information on-demand to make the right decisions.
If your financial software delivers data in real-time, you can run a more comprehensive array of reports faster and more frequently. What’s more, the amount of pressure removed from the month-end financial report since managers and executives already have the data they need to monitor and react to issues to improve performance.
Standardized spending and expense management
Implementing standardized expense policies through a robust accounting platform helps you gather insights into spending trends, decreases unnecessary spending and fraudulent claims while improving reimbursement turnaround time. Employees can submit expenses on the road instead of returning to the office or waiting until the end of the month to submit receipts en masse.
A standardized process also speeds up the process, reduces the chance for human error, and simplifies compliance enforcement while reducing the administrative costs and headaches that tend to surface without one.
Automated spend management
Automation has clear close process benefits that include speed, transparency, and of course, efficiency. But also consider how companies who lack automated capabilities experience delays when a vital member of the finance function is out on vacation or sick.
While executives and other finance leaders recognize the likely impact of automation on their organization, some feel their closing processes are too individualized that automation solutions couldn’t work without massive disruption and even bigger investment. However, by taking a measured, systematic approach with the right accounting software, finance heads can inject a new level of precision into their closings, while realizing competencies that seemed impossible before.
A faster, more efficient close shows a healthy organization and happier employees on both sides of the process. By examining and optimizing the current close process with an automated solution, you can upgrade your company’s insight, efficiency, and effectiveness for making informed decisions while eliminating error-prone manual processes.
If you need to close faster and more efficiently, an accounting solution like Sage Intacct helps you better understand and manage what’s important to your business because everything is integrated and reporting is easy. Sage lets you track not just financial metrics, but also crucial business metrics for real-time visibility into the state of your business.
As a Sage Partner, e2b teknologies is a best-in-class provider to move your business to the cloud. Find out more about how e2b and Sage can transform your business and help ignite your financial close process.