Eliminate Financial Close Bottlenecks with Automation
The financial close process is typically made up of a repeatable series of activities, performed in a specific sequence, by specific people, and by specific due dates. It sounds straightforward, but for some organizations, this process becomes chaotic due to late adjustments, confusing email chains, approval, and lack of document standardization.
5 Bottlenecks That Impact Your Financial Close
Bottleneck #1: Rework
Rework typically occurs when an individual completes a task out of sequence. Often, this is usually caused by poor visibility into the workflow process, since an individual may be unaware that a previous task was incomplete.
Bottleneck #2: Continuous Interruptions
During the financial close process, numerous high-priority tasks demand your undivided attention. However, staying focused can be difficult in an environment of continuous interruptions caused by people looking for status updates.
Bottleneck #3: Lack of Standardization and Consistency
A lack of standardization and consistency across related activities creates excess work for reviewers and approvers since they must waste time figuring out how an individual performer has set up their documentation. It also becomes difficult and time-consuming for colleagues to fill in during an absence, as they are unfamiliar with the performer’s layout.
Bottleneck #4: Performing Unnecessary Activities
Most departments believe that they fully understand the activities used in their close process and that all steps are necessary. However, the value of specific scheduled tasks for the close process may often be overestimated, and you may be wasting valuable time and resources on unnecessary activities.
Bottleneck #5: Exception Management
Exceptions often occur during the financial close, but managing them effectively can greatly impact your reporting accuracy and timeliness. Taking our reconciliations as an example, if we see something that is outstanding, we need to find out why. Are we expecting it to be there? Is it a timing difference that is reasonable? Or, is it unexpected and something that is an error that needs correcting?
Frequently, these bottlenecks slow down your financial close process, waste valuable time through rework, and can cost your company money. In this eBook, we’ll get to the root of a few of the most common bottlenecks and discuss how to mitigate process hiccups to increase productivity.