It takes most companies more than two weeks to finish month-end close cycles. When it takes you this long to process data, by the time you get the information you need to the people who need it, it is already outdated. Why continue to use decade-old processes that eat away time and the delay the results until they are no longer up-to-date? There are better ways to do this. TimeXtender has developed some tips to help you shorten the time it takes you to close each month.
5 tips to speed up your month-end close and put more time back into your day
Create Smaller Tasks
By breaking down the month-end close into smaller tasks, it becomes more manageable. It is easier to get started and easier to finish. One way to break up the close is to start at the end, with the final deliverables and due dates, and work backwards. Another way to break the process into pieces is to look at the balance sheet line by line and identify ways to get each line item done faster.
Utilize Technology and Automate
Simple applications, such as Excel and SharePoint, can be implemented quickly and result in more efficiency for accumulating and sharing data and reporting. However, they still take time to input the data. Data Automation tools such as TX Financials from TimeXtender can nearly eliminate the errors that 80 percent of spreadsheets contain as well as free up hours of time spent each day manually inputting data. TimeXtender is offering a free 30 day trial for companies who request it. Click here to learn more.
Go Forward, not Backwards
Change mindsets from looking backward to looking forward. Financial Professionals often deal with the past, rather than projecting where numbers will or should be. By changing the approach, working during the month with the finance team that can forecast effectively can save time and energy. By working from good forecasts, amounts can be accrued for the difference between what has been spent and what had been estimated and then monitored and adjusted over time. Management can be reassured that the numbers would not have changed significantly from the estimated ones.
Evaluate Close Areas that can be done in Different Time Periods
Some financial statement areas can be accounted for on a quarterly basis rather than a monthly basis. Doing items quarterly vs monthly can free up a tremendous amount of time each month. Identify areas that can be done quarterly. If there are multiple areas that can be done quarterly, stagger them the first, second or third month of the quarter.
Get your people involved. Ask for ideas on how to shorten the close. Your employees are your biggest asset. Have a collaborative staff meetings to identify areas that can change now and what changes can be made down the road. Get other departments involved and show them what you are doing and how they can help.
Did we miss any tips? What are your experience when it comes to month-end closes?
We'd love to hear your input or comments - feel free to add yours!