An inefficient month-end close process can be error prone or a costly use of resources and time. Here's how to fix that...
Most organizations across market sector and industry have a monthly closing cycle. For many organizations, the closing process can be painful and time-consuming.
An inefficient month-end close process can be error prone or a costly use of resources and time. It can cause non-compliance with the delivery of financial statements and reports required by regulatory agencies. This can result in fines, audits, or public scrutiny.
Here are five tips to speed up your month-end close and make everything less painful:
1. Document and analyze the process
Creating and documenting a list of month-end steps, along with the how, who, when, and how long they take to be performed will provide insight into overburdened staff, duplicated efforts, inefficient steps, and much more. This helps identify training issues, steps that can be standardized or automated, duplicated efforts, redundant data inputs and data issues, as well as steps that don’t need to be completed or can be created earlier.
2. Automate and standardize
This step sounds simple, as most modern Enterprise Resource Planning (ERP) solutions include built-in functionality designed to help expedite the month-end close. The problem is that many organizations are not fully aware of what their ERP can do to help automate workflow and standardize the month-end close process.
3. Close what can be closed early
There are accounts that don’t change at the end of the month. Identify and close these early; this helps move workload to more efficient time periods within the monthly cycle and eliminate month-end chaos.
4. Clean up your chart of accounts
A well-organized and efficient chart of accounts should follow recommended accounting standards for an industry. Review your chart of accounts to ensure it follows best practices for your industry. Eliminating accounts that are not required or utilized helps minimize accounting errors and incorrect postings.
5. Move to the cloud
There are many new cloud-based ERP solutions from leading providers that help minimize or eliminate a desktop-based spreadsheet dependent process. This helps create an accurate, data-driven, single version of the truth. Spreadsheets can lead to manual entry, calculation, rollup, and rounding issues, and they can be especially problematic when the only person that knew where the spreadsheet was or how it worked leaves or retires.
To learn more about how you can speed up your month-end close, contact the Meridian Partners Team. We have been successfully helping commercial, government, and public sector organizations do just that for the last two decades.
Meridian Partners is a minority owned company and SBA-certified 8(a) leader in providing Enterprise Resource Planning (ERP), Business Intelligence, and Budgeting solutions. Meridian helps organizations maximize business processes to be more agile, efficient, and transparent through the optimization of their enterprise systems.