The Benefits a Continuous Close Delivers to Your Company
Closing the books each month is tedious and time-consuming for finance teams.
Instead of closing at the end of every month, finance and accounting (F&A) could implement a continuous close process, completing close tasks two or three times a month. The tedious nature of the manual processes combined with the spike in workload at the end of the period is what creates the challenges of time spent on the close. This also leads to working extra hours, no time for value-added activities and increased risk.
Due to the time crunch finance teams are on, the inability to ensure accuracy increases risk. Rather than completing tedious manual tasks at the end of the month, finance staff could instead invest in strategic, value-added activities. In turn, these activities promote value in the organization.
Incorporating a continuous close is also beneficial as it provides insights in real-time. However, the most important thing to remember is before you can optimize, you need to standardize your processes.
Once you standardize, you can then focus on what you would like to optimize and what you would like to automate. Standardizing and automating means that you don’t have to wait on someone specific to get a report because you basically have it all at your fingertips.
3 Benefits of Standardizing Your Processes Inside a Continuous Close
#1: Save Time by Completing Close Tasks Throughout the Month
Closing the books consumes so much of the Office of Finance’s time. They need to prepare everything, make sure the information is accurate, deal with journal entries, and other important activities. So much work goes into the close process and by the time they finish, this data might already be less relevant. When F&A teams standardize and optimize processes, they can instead complete closing tasks a few times a month. A continuous close means stakeholders can get real data in real-time, which helps finance and accounting teams make strategic decisions for the company.
#2: Reduce Risk by Standardizing Your Processes
When completing the closing process manually, it’s common to produce errors due to the strict deadlines finance teams face. Using spreadsheets incurs a high error rate because teams are inputting numbers manually. How many times do we misspell something on our computer or cell phone? It is the same thing when completing the closing process manually.
When finance teams begin to standardize processes, they can figure out what needs to be optimized and automated. By monitoring the processes, finance teams then find opportunities to expand automation going forward. Ultimately, focusing on optimization produces the benefit of increased efficiency and effectiveness — not just now, but well into the future as the company grows.
#3: Invest More Time into Value-Adding Work
Historically finance and accounting teams spend so much time on their month-end close, they don’t have leftover time to focus on strategic activities. With the data they collect, F&A could be an important voice for the company, but don’t get the chance.
Automating close processes and incorporating a continuous close would free up F&A time for valuable tasks. In turn, they could spend that time on strategic work that will add value to the company. With F&A’s unique perspective and knowledge of the organization, they could be seen as advisors. They can interact with coworkers and be a part of the conversations when it comes to making company changes because they now have the free time, and they have insight into what’s happening within the company financially. Overall, incorporating a continuous close not only helps the F&A team but the entire company as a whole.
Written by: Isabella Delgado