Tips to slash time spent on closing out the month

Closing the books can be a nightmare for finance leaders and accounting teams - a nightmare many have to repeat every single month. It’s not to be taken lightly either. It’s important to ensure all transactions have been recorded accurately and completely so the executive team, the board and investors can use the resulting financial data to make decisions.

A good way to tackle improving the close process is to take a step back and pinpoint the things that are dragging it down.

Challenge #1: Gathering the financial records

The first step in the month-end close process is gathering all of the relevant financial information. For companies with disparate systems and paper documents, hunting down all of the information they need can be time-consuming. If paper invoices, purchase orders, receipts and checks are all spread across various people’s desks, in filing cabinets, or in the mailroom, there is a risk of losing valuable information needed to be sure all transactions are recorded accurately.

Tip: Create a centralized place to store documentation

Turning paper documents into digital files that are saved in a central location can make a big difference. Take the time to create a process for storing these records digitally, and make sure all of the appropriate employees have access and are trained to continue to bring in relevant documents throughout the billing/payment process. The upfront time investment to build a new process will pay off many times over in the long run.

Challenge #2: Reconciling data and closing gaps

Being able to close the books requires comparing data, likely housed in a variety of places, to be sure the transaction amounts line up and have been recorded correctly. Comparing data from paper documents, the accounting system, receipts and bank statements manually can be tiresome, but even more so if the numbers aren’t lining up and things are missing.

Tip: Be diligent with recording expenses throughout the month

If you wait until the end of the month to record transactions and identify what is missing, you’ll have a much larger hill to climb. Take some time each week (or ideally every day) to be sure your general ledger is up to date and anything outstanding is being followed up on. If you get in the habit of tracking early and often, reconciliation will be faster and easier.

Challenge #3: Lingering transactions or approvals