Financial close is a process long associated with tedious, error-prone tasks, underpinned by intense pressure to close the books as fast as humanly possible.
Efficient and dependable financial close processes help bring confidence and speed to corporate planning and decision-making – and help investors and shareholders to recognize it.
Best practices for a smoother financial reporting and accounting close
1) Identify inefficiencies and error-prone accounting processes ->. Midmarket businesses that excel often assemble a task force comprising representatives from various departments. The finance team provides them with a list of risks and concerns to investigate, and the resulting findings are consolidated and evaluated to identify areas for enhancement. This approach lays the foundation for creating standard operating procedures (SOPs) and implementing advanced accounting tools that are more interconnected and automated.
2) Develop good change management practices to create and roll out SOPs. -> Good change management strategy to help communicate the importance of standardizing tasks and cementing protocols for who owns what, and when and how they need to complete and submit their financial tasks. And as SOPs are created and rolled out, this is the ideal time to introduce and support the use of smart financial management tools, such as an ERP solution.
3) Implement and support a continuous accounting process -> “Continuous accounting” means workflows are established to spread financial close tasks out more evenly throughout the reporting period. The use of automated finance tools can help greatly to streamline this process with things like mobile apps and templates – all via the cloud to gather and integrate daily cross-departmental data in real time. This helps to avoid the month-end panic and also empowers teams to spot (and fix) errors early.
4) Automate and digitalize the financial close -> With an AI-powered ERP that provides cloud-based financial solutions, finance teams can devote more time to strategic and skilled activities that help their companies grow and pivot quickly in the rapidly changing market. Cloud systems deliver real-time dashboards that allow executives to customize reports and get deep insights any time during the month – from their device, desk, or wherever.
5) Get together after every financial close -> Many businesses take advantage of this momentary post-close breather to set up regular financial close debriefing meetings where teams can go off-site, and take a moment to analyze and share their ideas for improving and streamlining the process.