If the month-end close is like game day for the finance and accounting department, closing out the fiscal year is the World Series. There’s so much to do in a limited time and, in most companies, this is done with a smaller team than you’d like. There’s a lot of pressure and that can lead to a lot of stress.
A successful close isn’t just about managing the process but about managing your team and your time to make the best use of resources. Anything you can do to become more efficient will reduce the workload on your finance team, and make the close less stressful.
The Benefits of a Great Close
The perfect year-end close is a win/win for your organization. By wrapping up quickly and accurately, you’re able to move on to reporting and generate high-quality financial statements. This helps management plan and strategize and benefit stakeholders.
Closing efficiently also benefits your finance and accounting team, because they’ll avoid long, stressful days and get back to their day-to-day process sooner. A well-documented close also makes both internal and external audits easier and less disruptive.
Here are some steps you can take to successfully manage your team for a great close with less stress:
Automate As Much as Possible
Technology really is a beautiful thing. When it comes to closing the books, there are some powerful tech tools to help automate the process. The more manual entry work you’re doing, the longer the close will take and the higher the risk of mistakes.
Of course, not everything can be automated, but you can leverage technology to give you more time for key tasks. Automate as much of the close as possible so your team is fresh and focused on the strategic pieces that require them to be at their best. This can also greatly reduce the emotional toll of the close by allowing people to go home on time and shortening the total length of the close.
Front Load Your Workload
Reconciliations are an important part of the close, and they can also be a very time-consuming part. In keeping with our last tip, leverage technology to automate your reconciliations if possible.
Try to locate steps in the close that can be done early. You don’t have to be in full “close mode” ahead of time, but if one or two people on the team can get some steps out of the way, you’ll be able to cut time off the big project once you ramp up for the close.
Stop, Collaborate, and Listen
Teamwork is crucial during a challenge like the year-end close. And this year brings extra challenges to many teams who are working remotely due to the pandemic. This makes collaboration and communication more important than ever before.
Hopefully, you’re reading this while you still have a little time before the close. Take that time to stop, look at your current communications and collaboration tools and methods, and make sure they’re working for you. The middle of the year-end close is no time to find out that your team is out of sync.
Get feedback from your team and make sure everyone knows his or her role, who to reach out to for the inputs they need, and who is waiting and depending on their outputs to move forward. Smooth out any wrinkled now, before it’s too late.
While it’s very possible to spend too much time in meetings, make sure everyone on the team feels heard and has the chance to voice concerns or ask questions. You may want to take a few minutes for a virtual “stand up” each morning just to check in and ensure everyone on the team has a direction for the day and has the information they need to move the close forward.
Check the Checklist Off Your List
If you aren’t already working with a close checklist, now is the time to start. Put together a list that shows every step of the close process, which steps are dependent on others, and the order of the workflow.
Ideally, your team can view and edit the checklist in real-time so they’ll always know the progress of the close. Cloud-based close software can be a huge help here.
The close checklist isn’t just a way to track what’s been done, it’s also a powerful accountability tool. By signing off on the list, team members take ownership of each step in the close.
At first, accountability may not sound like a stress-reduction strategy, but it is. When each step in the close is owned by a specific person, you always know who to clarify with if there’s any confusion. This helps your team avoid wasted time and duplicated efforts, which can seriously reduce anxiety.
Practice Makes Perfect
Going back to our Superbowl analogy, the year-end close has a lot in common with the monthly close. That makes the month-end a great time to dial in your process, identify any bottlenecks, and prepare for a successful year-end close. By improving your monthly close, you’re also going into the end of the year with fewer surprises and fewer loose ends.
By following a plan, documenting your efforts, and improving your close process each and every period, you can help your finance team close successfully without unnecessary stress.