Account reconciliation, journal entries, and financial reporting are all components of the month-end close process, which are essential for obtaining a precise picture of business performance and guaranteeing compliance. Organisations face difficulties due to inconsistent data and processes and a lack of standardisation. Spreadsheets, emails, phone calls, and in-person meetings used in manual accounting processes can result in mistakes and are not long-term viable solutions.
Finance teams often spend a great deal of time and effort on the month-end close process, which should be a straightforward process.
Deloitte claims that “institutional memory” rather than clear and explicit protocols frequently governs the closing process. Different participants “simply know how things get done” since they’ve done it that way for years, according to them. Some finance teams follow a routine and have no formal processes in place. This is very different from a successful month-end close. They must continuously provide corporate stakeholders and executives with greater insight rather than merely at the end of each month.
There are five strategies to streamline your month-end close procedure:
The month-end close process can be made more efficient, transparent, and quick by automation in a variety of ways. But all too frequently, projects are delayed just because they depend on a crucial individual or because of competing priorities. The best place to start when adding more automation to your month-end closing procedures is frequently with simple, repetitive chores. Today’s accounting activities, for instance, are primarily managed by manual spreadsheets that are shared, updated, shared again, and updated again. All of these issues can be resolved with rebate management software. Read our blog on automation and how with PowerBI and Sage 200.
Get rid of inconsistent systems
Your month-end close could be postponed if you are keeping data on an incorrect platform, using too many different systems, or attempting to get around a platform by trying to use it for a purpose it was not intended for. It’s not always possible to integrate several dissimilar systems and make them compatible with one another, and this might result in major problems that must be analysed and resolved by financial teams.
Standardisation is important because it makes it easier to give real-time data when there are different systems in place. Finance comes closer to the continual close, where data is updated regularly and readily available – whenever choices demand for it. This happens once you can tie the technology to the process.
Make a data backup
In addition to making sure your accounting systems are completely functional and using the latest version, not having your data saved or backed up might cause further delay in the month-end process. Every transaction or significant number should, as a general rule, be maintained safe in the cloud or in a system that does not lose this vital data such as Sage’s Intacct. Making ensuring your online storage is routinely backed up and secure is also a smart idea. Inaccuracies in the figures that need to be precise can result from losing crucial data.
Access current information
The month end close procedure is a continuing challenge to those concerned in speed and accuracy. Information is being sought for by many organisations quickly. But they also need to have confidence in the information they’re using.
Due to data not being uploaded into the system in a timely manner, many finance teams discover that they only have access to accurate data at the end of the month. Since business decisions don’t wait until the end of the month, finance teams shouldn’t have to wait until then to get numbers. Key stakeholders will simply make decisions without having all the data-based information they require if that is the only time they have access to the data.
Operational effectiveness is the lifeblood of the accounting industry. All information should be recorded, either in folders or the cloud, and data and files should be carefully structured and current. Unorganised records or data that is misplaced can lead to mistakes, items being lost or worse, being thrown out, which adds to the delays in completing the month-end close as soon as feasible.
Have an efficient and precise month-end closing process
Everyone makes mistakes, but at certain times, such as the month’s end closure, they can be exceedingly expensive. By streamlining the month-end close procedure, you can avoid utilising erroneous data or time-consuming, manual operations.
To guarantee that your finance team receives the most correct data possible and can use this information quickly and effectively, switch to an automated accounting system right away.
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If you would like to know more about how Itas can help your business with finance automation, Sage implementation and improve purchasing control, you can get in touch at [email protected], call us on +44 (0) 1824 780 000 or contact us via our website at https://itassolutions.co.uk.