Whether it’s a small, mom-and-pop shop or a Fortune 500 company, every business should have a month-end process in place. But processes, however well intended, are only as good as the procedures that support it. Without structure, your month-end close can be a nightmare. Not to mention, you probably face pressure to close faster. So how do you do that? Follow these five tips to make your month-end close a smooth, successful and timely routine.
Engaging the finance team with the why behind the close process will not only motivate them to hit the deadline, but it will also better equip them to make meaningful contributions to the analysis.
I recommend completing your month-end during the first week of the following month. Tackle it as soon as the official bank statement is released …
Instead of trying to clean up a month's worth of accounting at a time, we get into the accounts regularly and reconcile the bank balance with the balance shown in the software. Then, at month end, there's nothing to do but the monthly bank reconciliations and review of the financial statements.
Using a technology that offers deposit reports, for example, can allow you to reconcile batch and bank deposits daily, so by the time the month end comes around, you’re already steps ahead of your to-do list.
What generated the best result was [a competition] during the last three business days of the month … to see who sent their closing in time. This month-end strategy helped us improve our productivity … and is the best innovation we have implemented to keep everything up-to-date.
This is particularly useful when you have a number of contributing team members to month end. Are you responsible for managers reporting the month-end data across multiple locations? Put a reward in place for the first manager to submit his data by the deadline. If you’re worried gamification may compromise the work your team puts in, don’t forget the handy checklist we mentioned. Stick to it and your team won’t miss a single step while competing.
Implement these tips and let us know how it improves your month end. We’d love to hear from you!