How to Close Out the Year in Record Time
Tis’ the season to be jolly! Unless you’re stuck in the office running the final financial close of the calendar year instead of spending more quality time with your friends and family. Nobody wants to work long hours and overtime to ensure the financial close happens on schedule. That’s true all year round, but even more so in the run-up to the holidays.
Here are a few things to think about that can help accelerate your close process, giving you the simplicity and control you need to spend more time with your loved ones over the holidays…
- Prepare your data in advance – For a lot of companies the poor quality of their data is what holds their close back from happening efficiently and effectively. Bad data can’t be trusted and it takes a lot of time to clean it during the process. Heads of Accounting need to make sure that the data comes into the process clean and validated. Ensuring a standard chart of accounts, using common financial data definitions and ensuring good data governance are all ways to ensure data starts on the right foot.
- Move as much work up-front as you can – Doing as many tasks as possible before month-end can reduce the spike of work 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.
- Follow a month-end closing checklist – It sounds simple but creating a list of all key lists and controls that need to happen can make the close process significantly smoother. The software which digitizes this process is also now available, helping to automatically document the progress of each item on the projects’ to-do list. As well as sending automatic notifications and alerts to keep everyone on task.
- Map out your people power – It’s rare to have a full team working full-time in the run-up to the end of the year. Many people book personal time off to get their holiday shopping done, look after the kids when the schools break and some just get sick. As long as you plan for this well in advance it doesn’t have to ruin your best-laid close out plans. Ask your team to tell you well in advance what their plans are and always presume someone will be unwell so you can plan tasks accordingly and make sure you have back-up planned to keep the accounting wheels turning.
- Automate everything you can – The average close takes 6.4 days according to the most recent industry calculations, most of which is taken up by basic but admin heavy tasks like transaction matching and balance sheet reconciliations. Specific financial close software suites are now available to automate these tasks and save valuable time. Trintech’s Adra Suite is able to reduce closes by three times, as well as producing more reliable outcomes on a predictable timeline and streamlining workflows to optimize efficiency.