Financial close periods – whether they are month, quarter or year end – come with high-stakes, high risk and high stress time for businesses. Not only is the financial close process time consuming, but if the numbers are wrong, you face rework, lack of data integrity, loss of trust from stakeholders and even the dreaded tax auditors.
Read our 3 minute blog to find out how to change this.
For many businesses, financial close is still a surprisingly manual affair, despite having an ERP system in place.
Some financial teams – even those in some pretty major organisations – have to extract and manage high-volume reconciliations and complex journal entries between multiple systems and spreadsheets manually.
While this limits the ability for your finance team to respond quickly to enquiries or change requests, it also runs the risk of increased human error, along with the Financial Controller having limited visibility of the close process for business and compliance requirements.
Common problems experienced across ERP systems for financial close periods include:
- Manually extracting data out of the ERP system to perform reconciliations and close activities in spreadsheets
- The ERP not having the ability to automate reconciliations outside of basic bank matching as there isn’t an integrated close task workflow
- Limitations on journal entries
That means many ‘must-do functions’ take place outside your ERP.
For your team – this means multiple system checks, manual search and extractions, and a lot of time in the good old Excel spreadsheet. It’s a sure-fire path to data integrity risks, version control issues and a frazzled, disengaged team.
In today’s fast moving world – how can you regain control of your team’s productivity to balance the financial close to other financial priorities as well as ensure risk is reduced for the balance sheet and you retain your hard-to-find talent?
The solution? Automate your financial close process
What’s missing in your financial close process?
Automation. Not just any automation!
You need a tool that is designed for financial close and understands the specific, complex tasks that are part of the process. Closing the gap comes down to specialist tech that can help you extract, input and reconcile at scale – here’s how it can help.
1. Match transactions at warp-speed
Manual matching and reconciling of transactions can work at a low volume – but when your business starts growing, you’re in trouble. It’s not just about volume (although that is an obvious issue) but also about the complexity of the data, disparate software systems and more time spent hunched over a spreadsheet trying to get those numbers to line up.
Sure, some transactions will be simple one-to-one matches, but others will be ‘many-to-one’ or ‘one-to-many’, meaning a lot more back and forth for your team.
The right tech can handle that complexity and manage reconciliations in less time. Software pulls data from your ERP system at one end, integrates with your bank at the other and then reconciles in minutes.
2. Standardise processes and workflows
Even with an ERP, many companies still use several software systems to manage their accounting data. This is particularly true if your business has merged with or acquired other companies – you may be stuck with legacy systems that house vital data but don’t connect with your central ERP. This setup can become a real issue at the end of the financial year, leaving your staff struggling with manual data extraction and imports.
Accountants end up creating their own processes, templates and spreadsheets to complete critical tasks. These live in different folders and are not visible or easy to track regarding close processes.
By using tech to connect high-level activities with dependent tasks, we can create effective workflows across multiple systems. Standardised checklists and templates build consistency into the process, making it easier to see mistakes and mismatches in your work.
With visibility boosted – your Financial Controller can see what’s being actioned across the team and catch errors early.
3. Create an audit trail
In a complex organisation with a large finance team, it can be challenging to track the path of your financial close process. Several people may have their heads down, working hard, but unable to tell exactly where they are in the financial close process.
Step one... step six... have they doubled back to fix mistakes or pulled in new data? Who last worked on the master reconciliation spreadsheet? Nobody wants to hand a messy pile of mismatched docs over to an audit team – it’s not a great look for stakeholders or the tax department.
Automated financial close tech tracks the whole process through that handy dashboard we mentioned earlier. All your team members operate in one system and any changes are recorded, creating an automatic audit trail if and when you need it. No more key info lost in emails or Excel spreadsheets, or saved to the wrong doc by a harried team member. Phew.
4. Have engaged, excited staff who can work on more strategic projects
Transaction matching is crucial, but it’s not exactly the stimulating and exciting work your staff want to be doing.
In fact, 94% of accounting and IT teams agree that financial close takes away from strategic work. By having this aspect handled by automation – you reduce human error and give your staff more time to focus on the good stuff – the strategic FP&A priorities and business partner support work where their value as a professional finance person can shine and add value to the company.
The benefits? Fewer manual errors, a far less stressful financial close process and a ‘to do’ business priority list that is getting ticked off!
It’s a win-win!
Integrate, streamline, save
How do you solve those entrenched financial close problems? With a clever piece of tech called BlackLine.
It’s a financial close whiz – connecting disparate systems, automating transaction matching and reconciliation, speeding up the entire process, and generally making life easier for you and your people.
It’s a game-changer.
Want to find out more about BlackLine?
Automating your financial close: A blueprint for success.
- How to simplify manual processes and gain better control over your financial close.
- What is required to make each blueprint step a reality, not theory
- The benefits of each step for key stakeholder education
