Article
Achieving financial excellence: enhancing the month-end close process
Dec. 5, 2024 · Authored by Baran Sönmez
What is the month-end close?
The monthly close process is a process in which accountants finalize all financial activity for a company every month, providing a comprehensive view of its financial health. While this process is critical for ensuring compliance and facilitating informed decision making, it often presents challenges for many businesses. The complexities involved can oftentimes lead to inefficiencies that put stress on finance teams.
Common challenges with the month-end close
If you’ve ever encountered difficulties with your month-end close, you’re not alone. Many finance professionals face challenges such as manual processes, inaccurate reporting and tight deadlines, which can make the process feel daunting. Some of the most common challenges associated with a month-end close include:
- Lack of automation: One of the largest challenges faced with the month-end closing process includes a lack of automation. Businesses that manually reconcile their accounts face significant burdens without automated systems. The dependence on manual methods drives up the risk of inefficiencies and consumes time that could be better spent on strategic tasks. By failing to automate persistent tasks— including journal entries and accruals—businesses miss out on opportunities to streamline their workflows and end up prolonging the month-end close.
- Inconsistent data entry: Data entry errors can significantly slow down the month-end closing process and reduce its accuracy. When finance professionals manually input data, the risk of human error increases, leading to mistakes like duplications and typos. These errors can also lead to inconsistencies that complicate the reconciliation process. Additionally, relying on manual data entry methods takes up large amounts of time.
- Fragmented systems: Finance professionals who utilize outdated and disparate systems for financial reporting often find themselves lacking the features needed to streamline their processes. When financial data is housed across multiple platforms, finance teams struggle to achieve a cohesive view of their company’s financial health. This fragmentation forces them to search for data from multiple sources, leading to delays.
