A few short days before 2020 is over and we can put this year in the rearview. From the pandemic and lockdowns to tax implications and changes, there is a good reason to celebrate the end of this year and look toward the future. Though challenges aren’t going away, we can at least say that we’ve gotten through this wild ride.
But with the end of any year comes the beginning of a new one, and with the beginning of a new year comes a series of resolutions. Whether it’s looking to destress, spend less time at the home office, or drop a few pounds, it’s important to look for opportunities to improve both your personal and professional life.
Though many resolutions fail, it’s often the result of extenuating circumstance. Setting aside an extra hour or two each week to hit the gym is a lot harder if you’re buried in tasks that prevent it. So maybe you need to take a step back and look at some of the things that cause you to stay longer—at least for a few days a month. The monthly close.
Four Areas of Focus for Monthly Close Improvement
Often relying on manual and labor intensive tasks, this is an area with a ton of space for improvement. Automation can help, and if you see this as something under your control, why not look for ways to step up your game? Luckily, a recent guide from Controllers Council sponsor FloQast looks to provide some answers.
Their guide, Definitive Guide to Effective Close Management, asks what it takes to make the close process more effective. If you’re resolving to improve, the goal is to shorten your close cycle, improve accuracy, reduce stress, and help you be more efficient so you can work fewer hours and still be confident in your financial results.
Offering a lot of tips, one that stood out was their breakdown of the close elements—People, Process, Documents, and Reconciliations—and the steps to extract more value from each.
1) People
From recruiting to culture, one of the most important considerations in close improvement is the people on your staff. The people who comprise your accounting team are critical to everything you do. But as your organization and staff continue to grow, there are some baseline considerations that can be key to you having one of the best accounting organizations in the world — or not.
How you recruit and position the players on your team can help ensure each member intuitively understands and performs their appropriate role, which in turn helps you close the books more quickly and accurately.
2) Process
One of the most obvious (yet underutilized) tips for improving the close process is to make it as repeatable and enabling as possible. Structured close processes are a must in getting to a repeatable and documented workflow, and with these put in place, you will get the peace of mind you need.
But building this process is easier said than done. In this, checklists are critical. Building a great close checklist emerges as the most critical step in reaching the goal. It underscores the requirement for a structured work environment, and the best way to simply ensure everything is getting done. It provides peace of mind for not just monthly close, but quarterly and yearly as well.
3) Document Organization
It’s an ever-expanding world of documents, albeit now in electronic form versus a room full of manila folders and paper. They represent a variety of underlying support files, comprised of invoices, cash payment records, contracts, and more. Included in them are the necessary details for reconciliation, and for any subsequent audit activities.
But making the most of this requires structure, and it’s critical to get organized and take control over your document management. From preparation to structure, your ability to organize documents goes a long way in making the close process easier.
4) Reconciliations
Trial balance tie outs are the final step in closing the books, to prepare you for financial reporting, and make you audit ready. But standardization of this process its critical and will help you to rest easier.
Approaching this requires a focus on alignment. People need to work similarly across the organization to close the books, helping to streamline review process, engender a consistent workbook review process and reduce errors in tying reconciliations back to trial balances.
A Resolution You Can Achieve: The Definitive Guide to the Monthly Close
The month-end close for many accounting teams is a labor-intensive, reactive process. There are, however, some simple ways to better organize your people, process, documents and reconciliations to streamline, speed and improve your close.
In this guide you’ll learn, tips and recommendations for building the optimal accounting team, best practices to structure your checklist, along with templates you can use, and how to best structure supporting documentation. Learn more and download here.
Additional Month-End Close Resources
How Work from Home Has Solidified the Need for Connected Financial Close
Five Challenges Standing between You and Month-End Close Peace
Demystifying the Month-End Close: What Is Close Management Software and Why Do I Need It?
