Great question! Every Controller wants to cut days off the close, but how is this really possible without throwing more people at the problem? Closing software (CS) is a powerful tool that will help organize your accounting department’s process, ultimately resulting in days cut off your close. Less time closing the books will free up your time to focus on being a strategic leader in your organization.
Let’s take a look at how CS can make your department more efficient:
One of the biggest problems with the Excel close checklist is that it’s typically owned by the Controller and the rest of the team does not have access. As a result, close status is often communicated during status update meetings (and we all know how fun those are!). CS eliminates these wasted hours by transforming the Excel close checklist into a collaborative tool for the entire team. Once a task has been completed, the reviewer receives an automatic alert to let them know the document is ready for approval. Email summaries alert the team to what’s behind schedule and give a preview of the upcoming tasks for the day. By increasing transparency, team members take more ownership for their role because it’s easier to understand exactly how their assigned tasks impact dependencies in the close process.
Understanding historical performance with an Excel close checklist is nearly impossible. We LOVE Excel, but it wasn’t built to be a project management tool. CS tracks how long it takes to complete each task in the close process and is able to provide actionable data showing where your team is improving and where they need help. Once armed with this data it’s much easier to assign tasks in a manner that will shorten the close and accelerate financial reporting.
The review process is slowed down by a lack of centralization – the Excel close checklist tracks procedure completion, but the documents related to those procedures are saved in a folder somewhere else. One major benefit of CS is the centralization of your processes and supporting documents. By saving supporting documents directly with each accounting process, CS prevents you from having to search through folders to find the file you need. Simple organizational features will guarantee your close will be done consistently month over month. Once you have a system in place, days will start coming off your close.
We discussed automated account reconciliations in Part 2 of the series, but it’s important to reiterate how they can save time in your department and avoid pain come audit time. The reconciliation process is not static, meaning data in spreadsheets and the general ledger can change. By using CS your reconciliations become dynamic and you will be alerted if your trial balance and your source documents no longer tie-out. It’s always better to get this news from a great piece of software than the auditors. By eliminating any possible discrepancies in real time you will save countless hours on the back end.
Hopefully the time you invested reading this post will come back to you next time you close the books. With the help of CS, a small investment of time upfront will pay major dividends on your team’s average close time. Everyone wants to cut days off their close and with CS that becomes a reality.
In part 4 of our 5 part series we’ll discuss how CS can help you with SOX compliance and your audit!
Until then, Happy Closing!