Ask almost anyone and they’ll say they’re looking forward to 2020 being over. But the one group who may not look forward to the end of the year? Finance and accounting professionals who are responsible for closing the books at year-end. Companies that follow the calendar year are headed into year-end close processes, while those who follow a fiscal year are looking forward (so to speak) to one.
If year-end close is typically a dreaded, arduous process for your business, we’ve got some helpful tips to make sure you get 2020 closed and out of the way as soon—and as accurately—as possible.
Tips for a Faster, Easier Year-End Close
- Communicate: Improving communication is one of the most valuable things you can do to both improve and speed up your close process. Talk to constituents and ask for feedback on the year-end reporting you provided in 2019. Did it include the right metrics at the right time? Are you over-reporting on certain facets while not providing sufficient enough insight into other areas? Are there reports that are now obsolete and can be removed from the close process for 2020? Honing in on exactly what is needed can ensure time is focused on the right tasks throughout the process.
- Vigilant Month-End Close: Since all the months build up to form a year, it tracks that improving the year-end process can stem from continuously improving accounting activities each month. Correcting errors in the month-end close process will decrease the amount of time it will take to reconcile accounts and make adjustments at the end of the year.
- Document Everything: Any adjustments or “unusual” accounting events should include detailed, thorough documentation as soon as possible throughout the year. With this information at hand, year-end closing and auditing will run much smoother, decreasing the time it takes to close.
- Make Year-End Close a Project: When year-end close is approached like a project, it will involve the right planning for milestones, identification of required resources, and preparation for avoiding possible “bottlenecks.” Create a timeline, identify and assign tasks, and then follow up on those tasks. Identify and label any risks that jeopardize the critical path. Make sure your year-end close incudes time constraints and measurable outcomes.
- Use Accounting Systems to Their Fullest: Your company likely invested a lot in your accounting system and other software, such as your ERP, to make reporting and year-end closing easier. Yet the majority of software users are only using about one third of their systems’ functionality. Be sure to leverage all the built-in capabilities of your system—such as budget vs. actual tools—to accurately reflect the organization’s performance throughout the year. Be vigilant at this time, as well, to make sure the policies, practices, and procedures for your current system are adequate. If not, you may need to consider updating or replacing your accounting system.
Year-end close is a large undertaking for finance and accounting, with no room for error. The sooner you can start preparing for your close process, the better.
With many companies having faced staff reduction or turnover throughout the year, now is the time to educate teams on what the year-end close process looks like, what reporting is required, and the anticipated due dates.
If you haven’t done so already, be sure to document your processes so other team members can fill in the gaps if someone needs to be out on medical leave for an extended period of time during the close process.
Close 2020 Quickly and Easily with ASI
In a perfect world, all your information will line up across systems and you’ll avoid a drawn-out year-end reconciliation process. While that may never happen, the more meticulous you are in organizational choices and preparation, the easier it is to prevent errors and have a smooth and swift year-end close process.
Turn your year-end close process into an easier part of the business cycle with the right accounting automation solutions. These solutions may be the missing link in the chain you need to take the stress out of closing and make 2020 the best year-end close yet.
The software experts at ASI have been helping organizations streamline business processes for more than 30 years by putting the right software in place for each business’ unique needs. Whether you already know what you need, or you’re looking for a partner to help identify critical requirements, our team of experts can help. Put your 2020 year-end close process on the right track today with help from ASI. Get a free consultation now.