How a faster month-end can improve financial visibility

The close is only the beginning - Adam Zoucha, EMEA MD, FloQast, explains how a faster month-end close can drive better financial visibility across the organisation - and power top-class decision-making

Picture the scene. You’re walking through the office (remember those?), and you bump into Joe from marketing. You start making small talk. You ask Joe what he’s working on (tweets, mostly), and he asks you what you’re working on. ‘Month-end close,’ you say. At that, Joe’s eyes glaze over. ‘Oh..?’ he says. He’s a nice guy, but he doesn’t know what you’re talking about.

You probably don’t have to imagine that particular scene. Chances are you’ve lived it at one point or another. Because for most people in most organisations, ‘month-end’ is seen as something distant, something that happens to the finance team – not something that’s central to the way the whole company runs.

But the reality is that a timely, accurate month-end close is essential for good decision-making, intelligent strategy, and a smooth-running business. If senior leaders have to wait days before the numbers hit their desks – or worse, if they have reason to distrust those numbers because they have a tendency to jump around after month-end – then agile planning becomes unnecessarily difficult. A trustworthy close that runs like clockwork doesn’t just make your team look good – it provides a bedrock of accurate information, giving your whole organisation the best chance of success.

Is faster better?

The rise of ever-more sophisticated accounting software has transformed the close over the last decade and never more so than during the pandemic. According to new research from FloQast, 64% of respondents reported that critical accounting processes such as the month-end close were executed either at the same pace as before the pandemic or faster, something most accounting teams would have thought impossible for remote teams.

There are obvious reasons why a quicker close is a good thing. Accounting teams spend less of their time on admin as automation picks up the grunt work, freeing them up to focus on helping grow the business. Decision-makers get the numbers earlier, ensuring trends, threats, and opportunities can be identified faster, and the right response can be enacted in a timely manner. Across the company, that means clearer, better-informed strategies and fewer last-minute changes, leaving line-of-business teams feeling well-equipped and confident of the direction they’re moving in.

Plus, from a purely operational point of view, a shorter close process means there’s more leeway for your team to handle any unforeseen issues that do arise. Because along with all the benefits of a faster close, there is an associated risk. Put simply, there’s a fine line between prioritising speed and reducing accuracy. After all, despite the growing role of automated technology in accounting, the close is still a fundamentally human process – reconciling between budgets and forecasts on the one hand and employees’ reporting on the other.

The best accounting software in the world can’t tap Joe from marketing on the shoulder and remind him he’s left a receipt for coloured pencils under his marble coaster. Delays and inaccuracies happen – so the challenge for your team is how to deliver a faster close while also spotting discrepancies and tracking signoffs with a high degree of accuracy.

Less haste, more speed

For those looking to reap the benefits of a faster close, it’s important to invest not only in automating your most common accounting processes, but also in improving visibility and collaboration among your team.

How easy is it for them to keep track of checklists and reconciliations? Do they all have access to the same progress reports? How do they communicate about outstanding tasks, and where do they monitor the actions and ownership for those tasks? Could some of your lengthy status update meetings be digitised to save time – and improve accuracy?

In short, the key to a fast and reliable close lie in equipping your people to work together more efficiently – not just automating repetitive tasks. When the close team can easily access all the information they need, all in one place and a standardised format, and when they can quickly share notes and update checklists in a central location – chances are they’ll be able to finish up faster, without worrying they’ve accidentally laid themselves a trap for the year-end audit.

As we saw above, that has positive repercussions across the organisation. The close is only the beginning – when it’s supported with the right technology and people, it can be the source of truly valuable financial information that empowers business teams to act strategically and with confidence. Even if they don’t know what month-end means.

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