Members in business talk about strategies and tools that can help make the monthly close pain-free.
Month-end close is one of the most challenging periods of work for finance teams, and it comes around every month. It can involve a lot of extra work and stress, depends on the organisation of other departments and external suppliers, and needs to be timely to stay relevant.
Finance teams use several techniques to make this process smoother, from collaborative tools to new technologies to people management skills to keep internal and external stakeholders in check.
Our panel of members shared their methods for taking the stress out of the month-end close.
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We’d like more automation in our close process
Farha Jamadar FMAAT, Finance Manager, Todd Doors
We’re reliant on other departments for goods in and sorting out stock adjustments, and ensuring all documentation has been processed. The business also now operates longer hours and more flexibility. This affects the close process as we have to work around this new setup. System limitations are needed to ensure processes are completed and exclusive access, which can be disruptive to business.
This is overcome by setting and enforcing communication and processes so that the control and reporting is done to a deliverable time. This is a workaround that is used once again to offset the lack of system automation; things can be auto-reconciled and processed in more developed ERP systems.
Excel is the main partner for month-end close, but I am aware of a complete day one automation on Xero where you close instantly, not undertake a two-hour process after hours. Our system is custom made, so we are tailoring it for automation and links to excel. We have reports that are able to run real-time data; this allows us not to rely on older, out-of-date information or wait for the close to finish.
Doing this remotely has been an adjustment but with information being readily available and the ability to collaborate has made the process fairly seamless. We don’t have to rush around to the warehouse or call stores. We can send out messages and notices so that things are done and pinpoint where there is an ongoing issue.
We’re working hard to keep everyone on deadline
Andy Murray MAAT AATQB, finance lead, Manna Pro UK
We have extremely tight close deadlines. We essentially have to close by the end of workday three. As a team, this has always been manageable. However, it would be nice to have a little breathing space for any ‘what if’ scenarios, should things not go according to plan, or should we come up against any unexpected issues. These often do occur within accounting and normally coincide with month-end!
As a team, we have implemented many process improvements to assist in meeting the month-end close deadline. Finance has been working with Supply Chain and Purchasing to ensure inventory is receipted into stock insufficient time and that there are no issues with any outstanding purchase orders. We’re also working with Customer Service to ensure that all customers are invoiced before the month-end invoicing deadline, and any discrepancies are investigated and resolved before closing.
We do have a large project planned later down the road regarding implementing a new Finance ERP system. There will certainly be many discussions around how we can utilise tech, further automation on current processes and any reporting tools which could be benefited from. There have been some very basic discussions around what we could be used to further our business partnering service to the organisation. This will fall part of the new system implementation project, we have touched on some more Power BI and KPI dashboard use.
Syncing with calendars keeps us on track
Sanjiv Bali, Senior Project Accountant, A2 Dominion
Ensuring data and information is received promptly from business partners and from reports extracted from the operating systems is a big challenge for us. We use a monthly timetable and a team task tracker to ensure the process is on track and to identify and resolve any issues for successful completion within the timeframe. We developed these using Excel and MS Outlook calendars. We were able to manage the process remotely very well, as we have all the efficient and productive communication channels in place to liaise within our teams and with business partners.
The focus is on streamlining the human element
Björgvin Vigfússon MAAT, Finance Manager, Westmorland Linen Rental and Laundry
As most of us can verify, month-end is never a straightforward ceremony. What was easy last month is like pulling teeth this month, and vice-versa.
In some cases, it can relate to different departments within the business being slow at processing the information for the previous month. For example, late invoicing or teams that are slow to verify purchasing invoices. It can also be that we are waiting for an external company to send their monthly bill.
Colleagues having to self-isolate can sometimes slow things down, as a different colleague will have to do the job, and he might not be as experienced as the one who does it normally.
With external suppliers, it has helped us to track usage and make an accrual adjustment for the month. If the challenge is internal, some ‘friendly’ pressure is placed on our colleagues to make sure all tasks are finished in good time.
We use Xero for our accounts, a system called Workforce for payroll and OpenCRM for sales. All of these systems/platforms are easy and efficient, and make our month-end process as efficient as possible. It’s more the human part that slows the process down if anything.
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It’s all about team support, and taking a break afterwards
Clare Elliott FMAAT, CFO, ILUX
The biggest challenge is the time constraint. You can easily end up rushing to get everything finalised as quickly as possible so that the Management Reports can be created in a timely manner. I like to ensure everything is ready to report within the first week. Otherwise, the moment has passed, and time has moved on. If you’re already through half of the next month, then time has run out to make any quick decisions and changes.
If you work in finance, then you know month-end is busy, and you know you’ll be ramping your efforts up a notch and possibly working a little longer than usual. To balance that, I always tell my team to steal their time back mid-month when they’re not so busy. It’s swings and roundabouts. Mostly we all love the challenge of a busy month-end, and it’s nicely compensated by a quiet week later on.
While everyone knows their role and their responsibilities, we also use a shared To-Do list, where all tasks are listed, and I can see at what stage everyone is at any time. It also indicates when someone is struggling and needs a bit of help to get back on track, so it creates a team spirit around the whole process. We can’t complete the month-end process without everyone playing their part, so the more we help each other, the more efficient and effective we are.
Mark Rowland is a journalist and former editor of Accounting Technician and 20 magazine.