6 Ways to Close Faster This Holiday Period
Closing the books at calendar year-end can be a thankless task. You need to get everything sorted and squared away before the holidays, but there’s a lot to get done, and very little time to do it. Couple that with the fact that most of your co-workers are winding down as work tails off before the festive break, and it’s no wonder accountants don’t like December. Here are our six suggestions on how to streamline your close and make it less of a burden…
- Conduct a risk analysis – There is always a balance to be struck between accuracy and speed when it comes to conducting a close. Work with senior managers to establish what the right balance is for the business for the end of the calendar year. Establish which financial statements and processes are lower-risk areas and so can be considered complete at that level, and prioritize high-risk tasks. Some businesses find that accruals based on forecasts are enough, provided they can be monitored and validated later down the line.
- Get a head start – Doing as many tasks as possible before month-end can reduce the working spike that typically characterizes a closing. Accounting teams can tackle this by creating pre-close checklists and activities that can free up time during the close cycle. Move as much work as possible into these pre-closing activities, such as tasks like reconciliations and journal entries.
- Ask departments for real-time updates – Strike up ongoing conversations with team leads across the business, like operations, sales, and marketing to get a steady stream of information about what they’ve spent, what they’re working on and what they are likely to spend next. Consider asking operations to give you invoices in the middle of the month so accruals can be started in the two weeks after the close rather than waiting until after month-end.
- Break it up into bite-size chunks – Splitting up a big task into smaller pieces makes it easier to manage, start and finish. You could start at the end, with the final deliverables and due dates, and work backward. Or look at the balance sheet line by line and identify ways to get each line item done faster. Whichever way you choose, handing each chunk to different members of the team to complete also makes it easier to swallow.
- Digitize and automate wherever possible – Use financial close software, like Trintech’s Adra Suite, to automate basic but admin-heavy tasks like transaction matching and balance sheet reconciliations. Ask vendors and customers to send invoices electronically, as it creates better data for accruals, facilitates paying invoices electronically; and ultimately, saves time.
- Collaborate – Get everyone involved in the close to suggest how they think the process could be sped up. Hold group staff meetings to identify areas that can change now, where training is needed, where money needs to be spent, and where change is dependent on other departments. Once the close is complete, ask everyone to feedback on how they think it went so you can improve things in January.
For more information on how to speed up but maintain control of your financial close process, we recommend our Whitepaper: Addressing the layers of chaos: 10 best practices to simplify your financial close