January 2020 marks the start of the busiest and most stressful time of the year for finance teams. With regular 40-hour working weeks being known to double just to meet core reporting and regulatory requirements; and pressure being piled on to ensure the business can make informed decisions for the year ahead. It’s no wonder that accounting professionals take more sick time in March than any other month of the year.
But what can teams do to ensure they don’t get swept away in the stress?
Constantly be preparing to close
The reports due are a culmination of everything that’s been accounted for throughout the past twelve months; which, if managed properly, means accountants have space to be strategic with their time throughout the year. Not all processes technically have to happen on a monthly basis, as some can be done in different time periods; helping spread the load and free up time in the fourth and final quarter. For example, bad debt allowances can be reviewed in detail in the second month of each quarter rather than the third month and then reviewed in more detail at quarter-end. While annual impairment analyses can use trailing 12-month data through the end of the third quarter and then be re-evaluated and updated if required in the fourth quarter.
Be ready to meet new rules and regulations
Accounting standards are constantly changing. All businesses should all be compliant with the much-dreaded AFC 606 revenue recognition standard by now, as the deadline for both public and private companies passed last year. And hopefully, everyone is already well prepared for the year meeting the new lease accounting standard, IAS 16. Those that aren’t will need to set aside time to think about how it will affect their specific business model, and not just in accounting, but throughout the business. Accounting teams must work closely with everyone throughout the sales pipeline to get this nailed. From briefing the sales team on how to weave it into their customer conversations, to working with legal to ensure they’re preparing contracts with the new regulation in mind so they can recognize lease revenues and process them properly.
Collaborate closely with other departments
An accounting team’s relationship with the different departments around the business can make the difference between the final quarter of the year flowing or sticking. By investing time and effort into getting to know other departments, and how they like to work; accounting can develop a way of reporting that works for both. Pulling together everything required for the end of the year will be significantly easier if they’re getting a steady stream of documentation on a regular basis, rather than having to chase people down during the final stretch. Working closely with teams like sales, marketing and IT is particularly important as they tend to have the biggest inputs and outputs to monitor, record and manage. Teams should consider involving them in regular discussions about how to improve the business’s accounting processes to make each year-end better than the last.
Invest in additional resources
The forty-two percent of accounting teams who told Accounting Today that recruiting and retaining staff is an issue is probably now worrying about being understaffed during the busy season. Investing in temporary support to bump up the team between January and March is a simple way to ease the workload. Experienced freelance accountants can get 85 to 90 percent of a return done without any help; leaving the inhouse team to help fill in the small gaps to make them final. Using financial close software can automate basic but admin heavy tasks like transaction matching and balance sheet reconciliations. Trintech’s Adra Suite has been shown to reduce the average close time by three times, freeing up valuable people’s power to focus on more complicated tasks.
Review and renew for 20/21
The end of one year provides the perfect opportunity to pause and reflect to better prepare for the one that is about to begin. Teams should carve out time in the final quarter to review what’s gone well in accounting and what could be improved upon. Could they be asking operations and procurement to find savings by switching suppliers, buying in bulk or paying invoices early in exchange for discounts? Would the business’s cash flow benefit from shortening payment terms or setting up electronic payment options for customers? Could the team’s day-to-day life benefit from a collaborative online workspace, like Adra Task Manager, which centralizes tasks lists and controls; and automatically documents the progress of each item on a project’s to-do list?
The dawn of 2020 not only marks the start of a new year but of a new decade. If accounting teams want to really relax during the busy seasons, they should be preparing to start January off on the right foot by approaching its busy start with the right mindset, relationships, processes, and technology. If they’re constantly preparing to close, ready to meet new rules, collaborating closely with others and investing in additional resources; there’s no reason why they can’t end the year on a high and start 20/21 with a celebratory bang!