According to a recent Adra Match study, 90% of financial executives report feeling pressured to close the books faster. Can you relate?
Even if you’re not feeling the financial close crunch, you’re likely still experiencing increasing demands on your time and resources. Businesses today simply have less time than ever before to make important decisions and get things done.
The research shows that a quarter of top financial performers are able to close the books in four days or less, without the need for additional resources. Read on to find out how you can join them.
- Streamline Your Process
Research from Redwood Software and The Hackett Group revealed that 33% of businesses classified as top performers report that finance staff capacity is the biggest bottleneck in the financial close process.
Some of the tasks consuming staff capacity can be reduced through automation or offloaded to more junior staff, assuming the tasks even need to be done at all! Sometimes, there are tasks that are performed just because they always were and a periodic review will help you identify areas of potential optimization. Also, ensuring your staff is fully trained can save many hours of inefficiencies.
The financial close and reporting process is normally four steps: collect, consolidate, report, then disclose. Problems arise when one step lags behind. For example, if it’s taking longer than it should to collect the data, the team can’t move on to consolidation.
You need to develop a workflow that will help you keep track of where the process is at and who’s responsible for what. Business technology can help. Some budgeting software, for example, will actually let you create a workflow within the tool and work on documents simultaneously. And as above, make sure your staff is trained on how to use the technology as the tools can only help you if used properly.
- Accelerate Financial Reporting
Business technology can also help with centralizing group reporting. For example, in 2002, book publisher Pearson had more than 400 general ledgers and 80 ERP systems. The company created a standard chart of accounts for the first time and then set up technical requirements to find what data needed to be captured from what sources, how it would be presented, etc.
We’ve come a long way from 2002 and this process is easier than ever with the right technology. Migrating data into one system can help speed up the reporting process and get you to a financial close more quickly. Integration tools can also pull data from many sources, if migrating into one system cannot work for you, providing information that business intelligence technologies can present in a meaningful way. This will allow you to get your reporting information together faster, so you can close faster.
- Improve Accuracy with Automation
Another common time-killer: errors. If you are trying to merge two different spreadsheets into one document, the capacity for human error is that much greater.
Business automation software can actually do this merger for you, making the information you do receive much more accurate. Identifying and maintaining one system of record is also important as then you have at least one reliable information source to make sure that you are accessing the most up-to-date data.
Integration tools can help translate data from other sources into a format consistent with your system of record, which improves your data quality and everyone’s faith in the resulting information. You can close the month faster if you don’t have to spend all that time double checking your information for accuracy.
- Increase Analysis Time
With business automation, you can spend less time administering the spreadsheets and more time analyzing the results. If your financial close is taking two weeks instead of four days, that is time that can and should be better utilized.
When your financial system is doing the collection and reporting for you, your team has time to take a harder look at emerging trends and patterns. And this increased analysis time enables your team to provide opinions and recommendations, along with your closing reports, providing better value to the business. Some business intelligence tools can even turn data into charts and graphs automatically, making it much easier to understand, and faster to report.
Predictive analytics technology has also really taken off recently and is making financial forecasting much faster and much more accurate.
- Choose Cloud-Based Applications That Support Your Needs
Speeding up your financial close can be largely dependent on the software that you use. There are many tools available today and cloud-based technology in particular is easier to access and turn on since there is no infrastructure requirement. These cloud-based applications can let your staff spend less time inputting data and more time assessing it. Beyond the financial close, automation software can also save time on other financial team priorities, leaving more resources for month-end. For example, certain cloud-based applications can automate the AR process or the AP process, which means you have that information available and already in the system for you.
When you’re selecting financial systems solutions, it can help to look for applications that let you do more. Even if you start off using it for only one function (such as employee expense automation) if the software lets you automate other processes in the future, you could get more bang for your buck.
You can create a customized solution to fit your needs. There are many tools available; let SHEA Global recommend which are the right ones for you.
If your team is finding the month-end or year-end close processes are taking far too long, get in touch. SHEA Global can help assess your workflow and financial close process and recommend the best solution to reduce your close time.
Learn more about our services by calling 905-470-6830 or visit SHEAGlobal.com.