EMEA
Unlock Efficiency: Modernise Your Month-End Close with FloQast
Outdated manual month-end close processes are a pain point for companies of every size – taking up as much as 40% of finance departments’ monthly working time and attention – an effort that could be better spent adding value to the business in other ways. Fortunately, companies can make their month-end close faster, and shorten completion times, by modernising their process.
Why Modernise the Month-End Close?
The month-end close is integral to the efficiency of a company’s entire finance function. As a foundation for other business activities, the month-end affects numerous dependent workflows such as Financial Planning and Analysis (FP&A), and Internal Audit. It also informs decision-making and company insights and represents a critical regulatory compliance and reporting component. With that in mind, the potential of a shorter and more efficient close goes beyond monthly time and cost savings to include downstream benefits – not least a reduction of pressure on accounting teams.
Accordingly, companies seeking to modernise their finance function should focus on their close as a priority. The transformation of the month-end close should begin with a review of inefficiencies and opportunities to automate before an exploration of how specific software integrations could help the company meet its performance and compliance needs.
Key Month-End Close Inefficiencies
An outdated month-end typically involves some or all of the following paint points:
- Task scheduling: Month-end close tasks are often manually scheduled on an Excel calendar, which means that accounting teams must spend time each month making individual updates to ensure that deadlines remain accurate. Manually capturing an exhaustive list of tasks, complete with correct assignees and due dates, is time-consuming – but that task is further complicated by additional considerations such as team member changes, and adjustments for national holidays – including, for global companies, holidays in other countries.
- Communication: Reliance on email or direct messaging apps at the end of the month can quickly lead to misunderstandings and delays. These exchanges can become long, unwieldy, and disconnected from the process, with critical information buried in earlier messages, and important stakeholders left out of the loop.
- Inefficient status updates: Companies that use manual task tracking (via spreadsheet) typically rely heavily on group update calls so that individuals can keep the team appraised of progress. These individual updates often include a large amount of minutiae and so can become a waste of time for many in the group. Since it can be difficult to capture individual update notes succinctly, it may also not be possible for team leaders to take a ‘manage by exception’ approach to their month-end close.
- Decentralised storage: Files stored in multiple locations often result in silencing critical data and knowledge during the month end. Without a single source of truth, team members may end up working on multiple versions of the same file, or be unable to access the most recent versions.
- Identification of process improvements: Centralised month-end close management (via Excel or similar software) makes it difficult to identify weaknesses or bottlenecks in the monthly close process since teams typically struggle to capture that type of data – such as which tasks were completed on time, and which were late. That lack of visibility also makes it very difficult to identify trends during the month-end close, including resource shortages and system report issues.
- New regulations: Manual controls that worked in the past typically won’t keep pace with regulatory change. That pattern makes the close slower and slower as employees struggle to apply outdated processes to the latest compliance standards, and have to verify compliance with individual checklist items manually.
Modernising Your Month-End Close
The modernisation of the month-end close process requires companies to source or develop software tools that address their workflow inefficiencies and which suit the skills and needs of their accounting teams. Accounting workflow software can help companies resolve close inefficiencies and streamline other critical accounting tasks: platforms like FloQast Close and FloQast Reconciliation Management, for example, deliver automated speed and accuracy, reducing administrative friction, and streamlining your process from end to end.
To get the most out of close software, companies must understand how the tools will meet the specific efficiency challenges that they face. With that in mind, let’s explore some of the key advantages of modernisation:
- Automation: Reduce or eliminate the tedious manual work that slows down the month-end close process. Integrate controls into day-to-day tasks, perform data analysis in seconds, send instant updates – and ease pressure on teams in the process.
- Visibility: Assign collective or individual responsibility for specific close tasks with the click of a button. Enhance visibility and accountability for those tasks, track progress via a high level dashboard, flag delays and problems, and keep stakeholders in the loop.
- Collaboration: Allow teams to communicate and collaborate on documents in real-time, via instant messaging features, from anywhere in the world. Enable third-party access and functionality to streamline audits.
- Centralisation: Create a single source of truth for critical month-end close tasks to ensure everyone is working on the most up-to-date version of files, and prevent data and knowledge becoming siloed.
The Automation Advantage
While shorter month-end close times and less pressure on employees represent significant operational advantages, it’s important to remember that modernising the month-end close is not simply a matter of speed and convenience.
By updating outdated manual processes, you can redirect employee focus and expertise into more value-adding tasks across the finance function, such as developing strategic partnerships and ensuring your company’s compliance performance remains optimal. Over and above the practical advantages of a modern, efficient month-end close, you’ll also be positioning your company to profit in the long term, by developing a flexible, scalable technology infrastructure that can adapt as your business expands, and as the regulatory landscape evolves.
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