3 Key Components of an Efficient Monthly Close Process
Speed is the result of innovation. After all, if no one had invented the wheel, humanity would be moving around much more slowly today. Similarly, in the world of Finance & Accounting (F&A), innovation is required to move towards a more efficient close process.
The faster you close your books, the sooner you can move on to higher value-added tasks, such as data analysis and strategic planning for new opportunities your business wants to pursue. This blog explores the three key components you need to focus on to improve your close management: people, process and technology.
Over the past few years, automation has become a hot topic of discussion when discussing ways to drive innovation within the office of finance. Automation ensures everyone is using standardized processes and that you have the right controls in place to streamline the workflow. This allows your personnel to leverage their skills and strategic capabilities to contribute to growing the business instead of spending significant time simply processing data.
Like any other change though, the people on your team must possess certain characteristics in order to adopt and maximize the benefits that new technology can bring. When growing your team, look for professionals who possess not only optimal skills for the job, but also those that are willing to adapt to change as needed.
As your organization continues to grow and mature, your team’s processes and the tools utilized by them will certainly change as well. However, for innovation to be successful, you must always be refining your talent. For this reason, organizations need employees that can quickly learn and adapt to changes in their day-to-day work. By doing this, you can ensure that changes made to improve your office of finance can be quickly implemented, and the resulting ROI gains will materialize sooner.
Trying to leverage technology to enable a flawed process is a common mistake that organizations of all sizes are making today. Specifically, many companies are trying to deploy automation simply to expedite their current processes. However, without laying the proper groundwork for automation and ensuring the processes in place are accurate and reliable, you run the risk of simply making a bad process run faster—exposing your organization to additional risk.
To prevent this, you need to analyze and document your current Record to Report process to standardize across the organization. Once this is done, you can confidently move forward with automation technology and know that your office of finance -is producing reliable financial statements and reporting that help drive crucial business decisions.
The office of finance has evolved from just a back-office function toa strategic voice in the business. After all, F&A teams are too well-educated today to be simple number crunchers. In order to accomplish this though, it is critical that the technology deployed allows the team to help drive the strategic direction of the organization.
The technology that has been historically used by the office of finance, commonly spreadsheets, presents a severe risk for organizations due to the lack of visibility, standardization and control. However, by leveraging a holistic financial close automation solution that encompasses the entire Record to Report process, you can effectively manage and view a single source of truth for your company’s financial performance. A comprehensive solution such as this allows you to address all key areas, and completely move away from an ad hoc process to a best-in-class period end.
With the right people, process and technology in place, you can significantly improve your close management, and begin to realize a best-in-class level of efficiency and effectiveness.
To learn more about automating your month end close, check out our eBook: How to Effectively Handle Close Management During Your Period End.
Written by: Caleb Walter