No one wants to find unpleasant or unexpected surprises down the road because you didn’t have an accurate picture of your business. Selecting the right automation tool is a crucial step in streamlining your month-end close process. With so many options available, it’s important to carefully what is a trial balance everything you need to know 2023 evaluate each tool to ensure it meets your specific needs. Automating processes eliminates paper-based documentation costs while also reducing overtime expenses attributable to late nights during month closes. It’s important to consolidate every category of transaction in one place.
- Technology can also be used to standardize account reconciliations and automate the creation and processing of the thousands of journal entries businesses inevitably work with.
- Automating processes eliminates paper-based documentation costs while also reducing overtime expenses attributable to late nights during month closes.
- Without accurate information, organizations risk making poor business decisions, paying too much, issuing inaccurate financial statements, and other errors.
- This lets them track that the business is trending in the expected manner.
- In post-close meetings, discuss what worked and what didn’t, and review assigned roles and responsibilities for the next month.
- Musk’s projected timeline for X to roll out financial services comes a year after Musk acquired Twitter for $44 billion.
The End Close is a series of review and reconciliation tasks that accountants do to update a company’s financial information for the accounting period, which could be a month, quarter, or year. This keeps your client’s financial transactions of the previous month, quarter, or year from mixing up with those of the next month, quarter, or year. As CEO and Co-Founder, Mike leads FloQast’s corporate vision, strategy and execution. Prior to founding FloQast, he managed the accounting team at Cornerstone OnDemand, a SaaS company in Los Angeles.
How Long Does the Month End Close Take?
Learn how FloQast helped Zoom overall its month-end Close process and offer new visibility for leadership following a successful IPO. In this on-demand webinar, you will learn the different components of your ROI, how to analyze your organization, and what defines a good technology partner. Finance and IT leaders share a common goal of equipping their organizations with ways to work smarter to enable competitive advantage. This intersection between CFO and CIO priorities is driving more unity in terms of strategy and execution.
Additionally, offer ongoing support after initial training has concluded. Encourage employees to ask questions or seek assistance whenever needed. Consider creating user manuals or quick reference guides that they can refer back to as needed. Regularly communicate progress updates with all stakeholders throughout the implementation process. This keeps everyone informed and helps address any concerns or questions that may arise along the way. Once you have narrowed down your choices, request demos or trial periods from vendors to get hands-on experience with their platforms.
Benefits Of a Month-End Close Checklist
Mutual staff training can also provide separation of duties and improve a company’s internal control environment. If you’re just starting, you can use Excel spreadsheets for bookkeeping. Routinely monitoring inventory levels will help you manage your working capital efficiently. If you overstock, you’ll trap money unnecessarily in inventory and risk wastage.
What is the month-end close?
This checklist provides a step-by-step guide to help you stay on top of things and make the process easier. But communicating cut-offs gives them enough time to attend to tasks like paying your invoice while also completing the month end close. If you’ve not found a way to move your accounting process online, it’s time to get flexible. But even if you’re accessing digital accounting software or online programs, it’s important to back up all of your documents. Seeing that speed and accuracy are the most critical skills in the month end close process, we have created a free month end close template to streamline your team’s month-end projects. Once you have all your numbers nailed down, you’re ready to close the books.
How can HighRadius help in your month-end closing process with automation?
But not analyzing your financials and taking corrective action can be catastrophic for a small business. Here’s our month-end close checklist to help you organize your workflows. Small business owners have their plate full with daily business operations, so it’s normal to dread the month-end admin. Complete an inventory count and check the numbers against what you have in your books. If you find discrepancies, this is a trigger telling you that something needs to change with your processes.
It’s best practice to standardise the month-end closing process across offices and regions. However, if employees aren’t adequately trained or in constant communication with one another, this goal can go awry. With SolveXia, the system is designed to execute the process in the same way every time, so standardisation is ensured. For any fixed assets that the business may have, such as storage, technology, equipment, etc., it’s pertinent to assign its depreciation and categorise that amount under business expenses. Along with that, you can make more informed decisions based on your company’s financial activities. It positions your executive team to make cash allocations that benefit each department of the company.
Knowing about the major one-off expenses coming down the pipeline is crucial for marketing, finance, and accounting alignment. But trying to chase down updates in Slack messages, via email, or in person can slow you down. Since month-end closing is a routine activity, every time you encounter a roadblock or problem, note it down and try to address it effectively. For example, if collecting data takes more time than planned, try to keep everything organized throughout the month.
A structured and detailed checklist can effectively organize the month-end close and ensure that no important tasks are overlooked. The key benefit to using templates within your financial close is that they standardize operations. Creating a standard operating procedure is proven to improve the speed and accuracy of your month-end process.
Essential Strategies for Efficient Expense Management
The most important closing period comes at the end of the financial year. In 2017, the average accountancy team reported that month-end close takes more than 8 days. This step helps you to record transactions like prepaid expenses, deferred payments, depreciation, and accrued revenues and expenses. Achieving this on a consistent basis depends on the procedure your team has to work with. Those numbers are a bit faster than APQC found in 2018, where the median close of 2,300 organizations was 6.4 days.
Centralize data and close activities, automate journal entries and reconciliations, strengthen controls, and enhance visibility. A properly and consistently executed month-end close is a fundamental practice for a well-run business operation. It is important for all divisions within the business to adhere to the month-end close process to provide consistency and reliability within the operation.
Never Forget Petty Cash
To cover all your tracks and the necessary steps that are part of the month-end close, here’s a checklist that you can keep handy. It makes it easy to either review each month and/or to set up an automated process that will cover each task for you. Additionally, for publicly-traded companies, financial statements and regulatory reporting have to remain in compliance with laws and regulations. There’s really no way around the process, so it’s best to streamline it and utilise financial automation software to make it easier on your team.
However, rushing through the month-end closing process can lead to mistakes and oversights. Your accounting and finance teams know the rhythm of the business, such as when vendors pay invoices and when your company pays their expenses (like software bills and salaries). Lean on these teams to set the timeline for overall review, including checking automated figures. While reviewers are noted throughout the process, Vasco schedules an overall review of the report around Day Six to account for any potential inaccuracies.
Test for validity and conduct preliminary walkthroughs with your team to ensure the information makes sense and is consistent across reports. It provides compliance and financial accuracy while preserving your data’s integrity for analysis planning. Spending and trading activity are somewhat predictable, but each month can introduce new issues that you and your teams need to consider.