An important financial event for any organization is the month-end close process. Whether the business entity you work with is a corporation, small business, or non-profit, closing the books is universally important. This activity indicates an organization’s revenue, debt, accounts payable, and profits.
For newly minted accountants, the first-ever accounting month-end close process is a rite of passage. Over time and with experience, some accountants can turn this seemingly mundane activity into a work of art by seamlessly weaving in technology, processes, and communication.
Here’s a look at some industry best practices that empower accountants to fine-tune their skills and understand how technology can accelerate their career success.
1. Have the Right Attitude toward the Month-end Close
Month-end accounts closure may not feel like the most exciting job for a new accountant, but it is extremely critical for accountants to take it seriously. Executives and investors leverage the data captured in this report to understand where the company’s financials stand.
Every accountant, from entry-level to chief financial officers, should be able to run the numbers. It helps them make relevant business decisions. Besides, this activity builds a strong foundation for more complex financials.
2. Accuracy Is Sacrosanct
One of the ground rules is that there can be no errors in the month-end close process. Hence, it is important to get every number and transaction right. If you notice that something does not add up, it’s okay to question it.
Make sure every account is in the right category. For example, placing cash overdrafts in the accounts payable section is something you may need to categorize correctly, and it is important to make the right call. This is because organized scammers often use accounts payable as a target for fraud.
3. Map Out Timelines
Often the information you need comes from multiple sources. Make sure you set a timeframe for all stakeholders to deliver information and that these timelines are communicated clearly and in advance. Set reminders in place in case you see people delivering information past their deadlines. This is a critical step in ensuring that the books are closed in time.
4. Organize Your Month-end Close Process Well
Break down the overall process into smaller goals for yourself, as it can sometimes get very overwhelming. Allocate enough time to complete the task and then have buffer time to check things through several times. Even one or two errors can result in a massive difference. Leveraging technology to schedule all tasks around month closing is a smart idea for any ambitious executive.
5. Standardize All Processes
It is most likely that you may be working as part of a team, or else you might have some junior members reporting to you on this process. If that is the case, it is essential to standardize all processes and easily collaborate on the activity. Accountants have different styles and approaches when it comes to the month-end close process, but it is better to arrive at one approach that works for the business culture.
6. Leverage Technology
Shifts in technology have greatly impacted the accounting field, and this has accelerated during the pandemic. It is important to be savvy about the various tools and software that can bring more speed and intelligence to the overall bookkeeping and the month-end close process.
There is potential to automate several processes. For instance, we can automate recurring calculations, and scanners can do invoice data scanning. Work with your company’s tech team to build a solid tech stack, ensure everyone is trained on them, and everything is in sync.
Leveraging technology saves the time that you will invest in manual work. It also creates a mental space for accounting professionals to play a more strategic and advisory role in key decision-making.
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7. Have Patience
The journey to perfection is paved with experiments and learning. So, don’t be frustrated if you take longer to deliver the work or find errors in calculations. Over time you will be able to do this in your sleep. Keep honing your skills, participate in training programs, and join peer groups that share best practices.
8. Learn About the Business
If you have ambitions to grow on the business side of things, this activity is a great place to start. This is because a company’s financials say a lot about the health and potential of the company. You can network with members of various teams and build relationships across the board.
9. Never Cook the Books
Transparency is an important value in this field, and it can determine the kind of finance professional you intend to be. If you find that certain numbers do not add up in the month-end close process, ask questions and get to the bottom of it. Sometimes it can be due to genuine error. Sometimes, it can be orchestrated as a cover-up.
The business world is constantly expanding, and so must you. Keep abreast of the latest technology, techniques, and regulations to stay on top of your games. You can also consider pursuing the Certified Public Accountants (CPA) program to learn more skills, widen your perspective, and bring more edge to your career. By pursuing this program, you become part of an elite group of accountants that excel and play leadership roles across the industry, from Fortune 500 businesses to non-profits.
The information and views set out in this publication are those of the author(s) and do not necessarily reflect the official opinion of Magnimetrics. Neither Magnimetrics nor any person acting on their behalf may be held responsible for the use which may be made of the information contained herein. The information in this article is for educational purposes only and should not be treated as professional advice. Magnimetrics and the author of this publication accept no responsibility for any damages or losses sustained in the result of using the information presented in the publication.