Six Ways to Simplify Month-End Closing
December 23, 2015
At a glance
- The main takeaway: The month-end close process can be a huge strain on accounting and finance departments, but it doesn’t have to be.
- Impact on your business: Below, Aprio’s Judy Kim shares the six steps companies should follow to ensure a smoother experience and even decrease the time it takes to close.
- Next steps: Aprio’s Assurance Team can provide the professional expertise and support you need to improve your close process, in addition to providing a better audit experience in general.
The full story:
Month-end closings can become a burdensome, routine, seemingly unimportant and time-wasting task — but they are very essential to every business. A proper month-end close will provide timely information and should be a key indicator used to make decisions and run the business. Utilizing the following six minor attitude and behavior adjustments, you can improve the process and significantly shorten the time it takes to close.
Six steps to help ease the close process
It is a common misconception that only the finance and accounting department are involved in the close process. However, departments throughout your organization actually provide much of the necessary information you need for an accurate close, as well as helping track various issues and providing feedback. Here are six steps to keep in mind as you navigate the close process:
- Create a calendar: To make sure everyone involved in the process understands their role, you should publish a financial close calendar and communicate timelines and deliverables, so everyone understands their involvement and what is expected of them.
- Provide templates: Try and create formulaic templates that your team and employees can use to capture the necessary information for month-end close, along with instructions on how to use them.
- Embrace automation: Automating month-end close procedures where possible can save time and reduce errors. The areas you can explore for automation opportunities include account reconciliations, departmental allocations, recurring calculations, recurring journal entries and depreciation. It is also important to utilize the best technology to help with the close.
- Streamline your chart of accounts: It’s important to simplify your chart of accounts as much as possible and use clear descriptions, including the purpose for which they are used. These accounts should be standardized and consistent across the entire company.
- Set actionable timelines: Create a checklist of each closing activity, along with timelines following the calendar we mentioned earlier. This will identify month-end close procedures that can be performed in advance and procedures that may no longer be necessary. This process can also help identify potential process improvements.
- Monitor issues: Report, track and document all month-end issues incurred during the close and then develop solutions that you can share with all participants.
The bottom line
Remember that this is a methodology, not a completed solution that will remain fixed. Change is part of the process. After going through the close procedure, find a way to reward those that participate and celebrate successes. Creating a system that allows you to identify valuable suggestions and recognize those that made them will enhance the process greatly.
Aprio’s Assurance Team can help you improve your month-end close process, in addition to giving you the resources you need to experience smoother, stress-free audits.Schedule a consultation with us today to learn more.