Each month, your organization’s accounting and finance teams must close the books, following a series of steps to record, reconcile, and review all of the company’s accounting data. This process may be smooth and seamless, or it may be a bumpy road fraught with missed deadlines and overworked, stressed-out team members.
If your month-end close process sounds more like the latter, virtual close software may be just what you need to ensure it goes smoothly and results in accurate and timely financial reporting.
What is virtual close software?
Virtual close software, also known as close management software, provides tools to help your team members complete the financial close cycle from anywhere. All of the financial close tasks, including bill payment, expense approval, recording journal entries, reconciling accounts, and analyzing variances, are laid out in a checklist. Accounting team members check these tasks off once they’re completed, and the controller can approve all workpapers before sending financial statements to the CFO and other finance leaders for review.
Virtual close software usually includes features that allow you to assign tasks to certain people and view progress towards the close.
How does virtual close software work?
Virtual close software provides a single place for your team to collaborate and manage month-end close tasks.
You create a month-end close checklist within the software and assign team members and deadlines to each task. Team members can easily document their work by attaching files and signing off on completed tasks. The company controller can add review notes and other feedback and sign off as needed.
Advantages of virtual close software
Because virtual close software is cloud-based, it’s easy for your entire close team to see which tasks have been completed and what is still outstanding in real-time, even when accounting staff is working from home or other remote locations. And because the software integrates with your enterprise resource planning (ERP) system and other accounting and forecasting tools, it can collect and consolidate financial information from different systems, all in one unified platform.
All of these advantages combined have helped many companies that have implemented virtual close software cut their time to close from weeks to days — all while improving communication and accountability.
How to get started with virtual close software
Closing the books remotely might sound a lot more complicated than handling your month-end close with everyone in the office. However, with the right tools, employees working inside or outside the office can benefit from improved collaboration, communication, and internal controls.
Here are five steps to getting started with virtual close software.
Step 1: Assess your existing close process
What is your current process for closing the books each month? If you haven’t already, start documenting all of the steps, tasks, people, and technologies involved in the closing process. It’s important to document what is happening — not what your procedures manual says should be happening.
This process will help you identify inefficiencies or weaknesses in your existing workflow. For example, does reconciling a particular bank account or credit card take hours and delay the entire process? Have certain accruals been overlooked for months on end? Do you have trouble getting an essential invoice from a particular vendor every month? Is one team member overloaded with work while others are under-utilized?
Identifying these issues can help you determine which features and functionalities you need in your close management software.
Step 2: Evaluate potential solutions
Once you know what you need, you can start looking for a virtual close software solution that will check all of the boxes.
You might begin your research online or by getting recommendations from colleagues who’ve used virtual close software in the past. Narrow your list down to a few solution providers and schedule demos.
To help you identify the best option for you, here are a few features to look for:
- Built-in automation capabilities. Being able to automate time-consuming, manual tasks speeds up your time to close, reduces your team’s workload, and allows them to work on higher-level tasks that bring more value to the organization.
- Integration with tools you already use. Having a tool that integrates with your existing ERP, Excel spreadsheets, and other tools is essential. This improves the flow of financial data between solutions and delivers a total value that is greater than the sum of all individual parts.
- User-friendly experience. The best software is user-friendly and allows your team to customize the close process without calling in the IT department or developers. Having a simple, intuitive user interface also reduces the time spent implementing the software and training new employees.
- Data-driven analytics. Choosing a virtual close solution that includes metrics and analytics as a feature of the platform allows you to generate insights that are specific to the close process. This information can help you further refine your day-to-day operations and identify opportunities for greater efficiency and accuracy.
- Collaboration with external auditors. Once the books are closed, your team may spend a significant amount of time communicating with internal and external auditors and responding to PBC requests. The best virtual close software solutions enable transparency and collaboration between the accounting department and its external auditors. Auditors should be able to access appropriate data with a self-service approach, saving your team an enormous amount of time.
Step 3: Talk to existing customers
Sales pitches and demonstrations can tell you a lot about the product, but what do the vendor’s customers say?
Check out reviews on sites such as G2 or Capterra. Ask the solution provider to put you in touch with existing customers of the same size or in the same industry. By hearing first-person experiences from existing customers, you get a better sense of how well the software performs in a live environment.Many organizations view the month-end close process as a necessary expense that offers little value on its own. However, the right virtual close software can improve internal resource management and internal controls. When your team members spend less time reconciling accounts and closing the books, they can shift their time and talents to more valuable activities, such as providing insights, supporting decision-making, and partnering with business leaders. This has a long-lasting impact that will benefit your company not just during the close, but throughout the year.