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.
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5 Month-End Close Tips
- Get expectations from the executives. Procedures can vary greatly from company to company. Get the inside scoop from your boss to ensure that you put processes in place to meet his or her expectations. It’s ideal to get this information on day one, but it’s never too late to ask. Not only will it make you more efficient in meeting your goals but will also show your boss how committed you are to the job.
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.Dave Robinson Managing Partner at Driven Insights
- Create a month-end checklist. Laying out all the necessary tasks needed to complete the month-end close will ensure it’s a systematic process. This ensures that no step is skipped, and helps surface and resolve any roadblocks keeping you from meeting your goals.
- Set a timeline and stick to the deadline. Take the tasks from the checklist and map out a timeline of what needs to be completed when. The timeline should include deadlines for both you and other team members who contribute data to month end.
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 …Thomas J. Williams Enrolled Agent at Your Small Biz Accountant, LLC
- Be aware of technology that speeds up the close process. The days of paper trails and manual tallying are over. There is a variety of technology available to streamline and automate the many tasks needed to get closer to completing the month-end close. Making changes to automate month-end tasks such as bank account reconciliation or recurring calculations saves time and minimizes human error.
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.Courtney Barbee Co-owner/COO of The Bookkeeper
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.
- Gamify it. We know completing the month-end close isn’t the most exciting work (just ask our accounting manager), but gamification can drive workplace performance. Gamifying the close will make what was once a boring task a little more exciting.
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.Cristian Rennella CEO and Cofounder of elMejorTrato.com
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!