The long nights spent closing the books. The endless hours staring at spreadsheets trying to figure out why the numbers don’t quite add up. The ever-growing list of tasks from the CFO, FP&A, and, well, just about everyone else. We all adore accounting, you see!
The truth: Account reconciliation, journal entries, and financial reporting are all parts of the month-end closure process that are crucial for getting an accurate picture of business performance. Organizations struggle with inconsistent data and a lack of standardization because their infrastructure depends on so many different people, technology, and processes.
This article highlights the accounting process bottlenecks that cause delayed month-end closes and how using HighRadius’ solutions can remove friction from your data sources and result in better closings.
Closing the books faster helps businesses make quick and efficient decisions. So how do you speed up the month-end close? By working extra time and extra days? No! Through a combination of innovation and automation.
Let’s explore why there is friction in your month-end closing and difficulties associated with it:
Disconnected Systems: Whether you work for a small or large business, it’s probable that data is spread out throughout a variety of systems, such as several Excel sheets, specialized billing or customer service platforms, enterprise resource planning (ERP) software, and others. This makes it difficult to compile the information into one place.
Manual Processes: It takes time to compile data from different data sources into a single report, your month-end closing logs. The data must be manually entered again into the new Excel sheet by employees after gathering all pertinent papers. This is wasteful of employee capabilities and introduces the potential for error.
Speeding up the month-end close makes your business more competitive in the information economy. A better closing process makes the business more agile and adaptable to financial changes.
Consider using the following techniques to expedite your month-end close:
Excel is frequently used by finance departments, and for good reason. Large amounts of data can be tracked, analyzed, and estimated with the application.
Relying on a bare-bones version of Excel alone, however, is more useful when a business is small or working with little data. Tracking multiple spreadsheets becomes unwieldy once the business grows.
For instance, the need for manual data entry allows for human error. Similarly, sharing multiple spreadsheets via email can cause issues with version control. This back and forth may cause your month’s end close to be delayed by several days.
Instead, Consider switching to a cloud-based service instead. With the use of this technology, data is automatically uploaded into single data storage from several business systems. The cloud reduces reporting time.
Just as businesses have multiple data stores and enterprise programs, many businesses also lack a single source of truth that would collect and house that data.
For example, financial data necessary for the closing process may spread across multiple enterprise resource planning systems within several business units. When it comes to the month-end close, the team must navigate multiple platforms.
Like using numerous disconnected spreadsheets, this process is tedious and time-consuming. It also prevents financial team members from access to quality data until the end of the month.
A more efficient process would entail using a platform that combines numerous systems. That platform can then retrieve data as needed continually. This software then serves as a single source containing all updated information.
Speed and accuracy are constant challenges for those involved in the month-end close process. Many organizations are seeking the information at an accelerated pace. But they also need to be able to trust the data they’re acting on.
Many finance teams find that they only have access to accurate data at the end of the month, due to data not being uploaded into the system in time. Finance teams shouldn’t have to wait until month-end for access to numbers, especially since business decisions don’t wait until the end of the month. If that’s the only time key stakeholders can access data, they’ll simply make decisions without having all the data-based facts they need.
Consolidating data frequently occurs through manual processes also used for making reports and reconciling errors. Any meaningful improvements in this process likely require some degree of automation.
To automate effectively, first look at the extended month-end close process.
This may include the sub-ledger close, account reconciliation, and submission of regulatory filings. With a picture of the entire close process, your financial team can identify areas for improvement via standardization, simplification, and connectivity.
Technology is a must-have when it comes to removing friction from your data sources for better closing. Choose HighRadius, best AI-Powered Autonomous Accounting software to:
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HighRadius Autonomous Accounting Application consists of End-to-end Financial Close Automation, AI-powered Anomaly Detection and Account Reconciliation, and Connected Workspaces. Delivered as SaaS, our solutions seamlessly integrate bi-directionally with multiple systems including ERPs, HR, CRM, Payroll, and banks. Autonomous Accounting proactively identifies errors as they happen, provides the project management specifically designed for month end close to manage, monitor, and document the successful completion of tasks, including posting adjusting journal entries, and provides a document repository to support each month’s close process and support the financial audit.
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