Financial Automation

Automate Your Month-End Close

As your business grows, so does the complexity of your financial close process. From the account reconciliation process to issuing financial statements, your accounting and finance teams have many tasks to complete in a relatively short period.

The financial close process can be stressful and prone to errors. However, taking advantage of close process automation can enhance efficiency, reduce errors, and free up valuable time for strategic analysis and decision-making.

So, let’s explore how automation can improve the financial close process and how to create an effective automation strategy for your organization.

Key Components of an Effective Automation Strategy

Many organizations begin their automation initiatives by starting with financial automation software. However, while technology plays a big part, it’s a good idea to slow down before moving fast.

Here’s what your financial close automation process should involve.

1. Process standardization. Before implementing automation, it’s crucial to standardize processes across the board. Automating inconsistent, bloated processes is difficult, if not impossible. Taking the time to standardize and streamline your financial close processes ensures consistency in how tasks are performed, making automation more straightforward and effective.
2. Integration of systems. Watch out for financial close automation software that doesn’t integrate with your existing systems, such as your enterprise resource planning (ERP) or customer relationship management (CRM) software. Seamless integration allows for real-time data flow and reduces the need for manual data entry.
3. Scalable solutions. Your chosen automation tools should be scalable to adapt to the business’s growing needs. Adding new users and modules as needed ensures you won’t be out shopping for a new solution this time next year.
4. Comprehensive implementation support and training. Failing to implement your new financial close automation software properly can disrupt your team, negatively impact financial reporting, and lead to public embarrassment—especially for public companies scrutinized by regulatory organizations, investors, and other stakeholders. Your automation solution provider should have a well-crafted implementation plan to help you ensure all staff are trained in your new tool.
5. Continuous monitoring and improvement. Implementing automation is not a one-time task. Advancements in technology and changing needs and roles force your financial close processes to change with them. Continuously monitor and update your processes to ensure they remain efficient and effective.

Steps to Automate Your Month-End Close

Now that you’re ready to leverage robotic process automation (RPA), machine learning, and artificial intelligence in your month-end closing process, follow the steps below.

1. Assess your current processes. Begin by thoroughly assessing your current month-end close process. Conduct surveys or interviews to find out what processes your accounting professionals are actually following—not just what’s documented in a process manual or month-end close checklist. This step helps you identify dependencies, bottlenecks, and areas that would benefit most from automation.
2. Select the right tools. Choosing financial automation software and other task management tools can be tough. Look for automation tools that best fit your organization’s needs, considering data integration capabilities, scalability, real-time visibility, budget, and ease of use. Solutions that incorporate dashboards can also provide visual representations of your progress toward the close.
3. Implement in phases. Changing too much at once can overwhelm your team and lead to change fatigue. Roll out the automation in phases, starting with the most time-consuming or error-prone manual tasks. This phased approach helps build buy-in from team members.
4. Train your team. Provide comprehensive training to your accounting team on the new automated processes and tools to ensure they are comfortable and proficient in using them. Your solution provider should provide training resources to help with this effort.
5. Monitor and optimize. Continuously monitor your automated accounting processes for issues or inefficiencies and make necessary adjustments. Collecting regular feedback from the finance and accounting teams can provide insights into areas for improvement.

Best Practices for Sustaining and Improving an Automated Month-End Close

Once you’ve invested the time and money into automating your financial close process, you want to ensure the changes stick. The following best practices can help.

• Maintain a single source of truth. Lacking a centralized data repository can be a hurdle to intelligent process automation. When team members have Excel spreadsheets, reconciliation templates, and other financial documents required for the month-end close stored in emails and on their individual devices, collaborators can’t access them quickly, and you run into version control issues. Make sure you have a central repository for all bank statements, reconciliations, and other workpapers to ensure a smooth financial close process and create audit trails.
• Review and update your processes regularly. As technology, roles, and best practices change, so should your close cycle. Regular reviews help identify new areas for automation and ensure that existing processes remain efficient.
• Maintain data integrity. It’s difficult to keep your financial reports error-free when people can make changes in an unorganized manner. Implement controls and validations within your automated systems to ensure the accuracy and integrity of financial data.
• Foster a culture of continuous improvement. Encourage your team to seek out and suggest improvements to the automated month-end close process.

Benefits of Automating the Month-End Close

Automating the month-end close process offers several benefits, including:

• Increased efficiency. Automation significantly reduces the time required to complete transaction matching, journal entries, accruals, reconciliations, intercompany eliminations, and other closing tasks. This allows team members to focus on analysis and strategic activities.
• Enhanced accuracy. Automated processes reduce the risk of human error and allow you to find discrepancies in the books much faster. This leads to more accurate financial reports and reliable financial statements.
• Improved compliance. Automation helps ensure that all financial transactions are recorded and reported in compliance with relevant regulations and standards.
• Better business decisions. Automating repetitive tasks allows your finance professionals to deliver more timely and accurate financial information on which decision-makers base their financial decisions.
• Greater employee satisfaction. Eliminating repetitive and manual processes allows finance professionals to spend more time on higher-value strategic work. This can lead to higher job satisfaction and lower turnover among your finance team.

Why Choose FloQast for Automating Your Month-End Close?

FloQast helps some of the world’s top companies automate the financial close process. By offering a comprehensive suite of tools designed to streamline and enhance the accuracy of financial reporting, we reduce close time by 26% and increase close accuracy by 39%.

Our close management software features include seamless integration with your existing accounting software or ERP systems, real-time collaboration tools, and customizable workflows tailored to your organization’s specific needs. When you choose FloQast for financial automation, your entire close process stays organized in one place, and you can leverage technology to achieve a more efficient, accurate, and stress-free month-end close process.

Automating the month-end close process can bring significant benefits to any organization. Following the steps and best practices outlined above can ensure a smooth transition to an automated process, leading to improved efficiency, accuracy, and overall cost savings.

To find out how FloQast’s financial close software can help you achieve these goals, request a demo today. We’d love to show you why we’re an excellent choice for any organization looking to enhance its month-end close process.

Stefan van Duyvendijk

Stefan van Duyvendijk is the Accounting Operations Evangelist at FloQast. Previously, Stefan served as the Corporate Controller for Kodiak Cakes, a private equity owned, leading consumer packaged food company, and as a Controller for Skullcandy, a multinational headphone CPG. These positions followed his five years at KPMG. His experience includes ASC 606 implementation, reduction of financial close timelines, accounting operational improvements, business combinations, financial statement audits, SOX audits and implementation, management reporting, debt, treasury, and systems integrations/implementation.