The end of the month can be hell for accountants, the end of the year even worse. The reason for this is simply that closing is often one of the most painful and frustrating processes throughout the year.
One of the main facets that people become frustrated by is the speed of closing, with one element holding up the entire process, slowing every other person in the team down. It makes for frustration and employee discontent.
There are other ways of making this process quicker than those outlined below, but these are the ones that will ultimately improve your closing process, but without impacting on your bottom line.
What we have outlined below are four key ways in which companies can improve their financial close, without excessive spending.
One of the key elements to closing that people find frustrating is that it is essentially one long chain that needs to be followed in order to get to the end point. Through setting out clearly what should be done and by when, it becomes clear where the process is being clogged and could do with an improvement.
Equally, speeding up the process comes down to improving on the existing systems, which are often deeply ingrained. The roadmap can be created as a baseline to performance that should be built on every month until the time frame is more manageable and less frustrating for all those involved. It will allow for a combined effort to improve and continue improving.
Make Everything Electronic
It is depressing that in 2015 there are still people who claim that they cannot get a certain document in electronic form. There are people who are willing to wait for days to receive something through the post in order to complete an element of the close.
If anybody says this, it is simply not true, I can’t think of anything that could realistically not be done in electronic form. Unless your company deals exclusively with the Amish there is no excuse for this to be the case and will only slow down the process, wasting time that you should be able to use elsewhere.
Essentially the most important question is; why would you want to work with anybody who couldn’t use a computer properly?
Accountability in the process is a key component to its success. Simply put, people will be more inclined to do a better job on their part of the close process if they have responsibility for it.
This seems obvious, but with many companies the delegation is often different each month with different people sent to do different things on an as-and-when basis. Having one person responsible for specific items within the process will mean that they will both become better at it quickly and will also do it quicker.
It also means that with each person knowing others place and role, a dynamic is created where the individual does not want to let down the team, further increasing the chances of a fast and successful close.
Establishment Of Key Areas
In any process there will be pinch points where it does not work quite as well as it should do. If these can be established within the closing process then it becomes possible to reduce the pressure on these areas and allow others to move quicker.
This comes from investigating the timings of what is taking a long time and then establishing how this can be fixed.
It is not simply a one-time exercise either, it is something that needs to be undertaken on an ongoing basis. Once the roadmap discussed earlier is established it becomes easier to identify problem areas and then fix them. In time, this identification will shift from areas that were bad and now good, then to improving all other areas.
Through this kind of work it is possible to streamline the closing process and improve the performance of the wider finance team too, without needing to spend thousands on new technologies or systems.