Read how in just a matter of weeks, Qualys leveraged FloQast to standardize the close process and organize controls and documentation for a more simplified SOX compliance. Learn how FloQast helped Zoom overall its month-end Close process and offer new visibility for leadership https://accounting-services.net/small-business-bookkeeping-basics/ following a successful IPO. If everyone has access to the reconciliation documents it will be difficult to keep the work error-free when changes are made in an unorganized manner. Having a system where only authorized employees are allowed to access the documents is essential.
On one end of the spectrum are the accountants, controllers, and CFOs who keep it all in their heads and use a lot of manual processes. That can work for a while, but as the accounting department grows, that process can become total chaos. Tribal knowledge abounds, and tasks can be easily Small Business Bookkeeping Services overlooked, especially if a key person is out for a few days. HighRadius’ Autonomous Accounting can help your business make the month-end closing process faster, smoother, and error-free. Its AI-powered transaction detection system gives access to real-time data and helps spot errors.
Automation provides a number of advantages for the monthly closing process. Automated systems enable more accurate tracking of invoices and receivables, faster reconciliations, and more efficient communication with vendors and stakeholders. Automation also enables finance teams to review accounts ad hoc, speeding up the close process and reducing errors. Automation ensures data is consistent across departments and compliant with regulations.
What reports to run at month end?
Month-end reports should undoubtedly include your company's financial statements. But they should also contain operational data, metrics, and dashboards that are useful and meaningful for generating insights. Remember, your company's leaders will use this data to make decisions.
In accounts receivable, accruals are used to report revenue (and corresponding accounts receivable) earned during a given month that have not yet had their transactions recorded. As with Step 1, this part of the month-end close is much more transparent, accurate, and swift if you’ve been recording and tracking spend automatically in your accounting system. You’ll have much less risk of maverick spend or fraud throwing a spanner in the works, too. Remember, your specific procedures may vary based on your industry, accounting methods, available technology, etc. Your goal must be to reconcile as many accounts as you can each month. These are accounts that deal with high volumes of transactions, making them susceptible to being off by a notable amount.
How to Improve the Month End Close Process?
Further analysis depends on these statements, and hence it is crucial to ensure they are accurate. Remember that your financial statements will be accurate only if all the data is correct. Only when you complete the above steps can you generate the statements. You must carry out the closing process for all the months at the year’s end, which would be challenging and take a lot of time. Another worrying scenario is that trying to finish the reports quickly could lead to errors.
The month end closing process consists of collecting all financial information and statements for reconciliation and reporting at the end of each month. It’s necessary to maintain proper oversight of healthy cash flow, support informed decision-making, and allow for accurate financial planning. Each item on the list is often done through a separate spreadsheet by isolated individuals specific to their departments. When done the traditional way, these tasks are invisible to the wider finance function, and it can be difficult to integrate the work with the monthly closing process as a whole. A sound accounting system depends on maintaining accurate records of financial information. You will find it simple to close the books during the month-end close process if you consistently keep track of all transactions.
The steps of the month end close process
Poorly organized, low-visibility data makes it impossible to determine if the month’s financial information is accurate and complete. Reports that contain errors or missing details jeopardize the integrity of the company’s books. With so many decisions and assumptions riding on the precondition of accurate financial reporting, it’s imperative that teams create total visibility in their data. Also, if there is an error in the data, using the manual process will take a lot of time and effort to find the cause and fix it.
Once you create a month-end close process checklist in Excel, you can use our financial close management software to automate tasks to save time, reduce stress and maintain accuracy.
The month-end close process can be a challenging endeavour for those who are not well-versed in accounting.
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One of the first steps in a systematized close process should be tying up the month’s loose ends.
HighRadius’ Autonomous Accounting Solution provides financial close automation which offers project templates, close task management, and accounting anomaly detection. Most accounting teams can provide answers due to their direct involvement in all the processes. Examine your checking and savings accounts, loan and credit accounts, and digital accounts, such as PayPal. Check your balances, deposits, and withdrawals to find discrepancies. Refocus your teams on analysis by replacing repetitive, spreadsheet-heavy work with leading-practice automation. Centralize data and close activities, automate journal entries and reconciliations, strengthen controls, and enhance visibility.