In a recent survey we conducted on LinkedIn, 56% of finance teams say they close month end on day 6 or beyond.
Month-end is a stressful time for finance teams. When you spend days frantically trying to get the books closed and make sure all of the numbers are accurate, it feels like torture.
The worst part? Often stakeholders are waiting for the information and if things are running late, you feel the pressure.
How can you make your month-end close stress-free, or at least, less stressful? Here are 7 tips to leave you less stressed at the end of it!
1. Document all the steps required to close the books
To close the month easily, you should have a documented process to follow.
This allows your team members to allocate their time and energy towards getting everything done.
To improve your processes, it’s worth challenging yourself and your team and asking ‘Can any tasks happen in parallel?’ or ‘Would a different order help?’
Documenting your process also ensures that your future self or anyone else on your team can easily close the books should there be changes in staffing.
2. Automate processes
Whenever you can, automate workflows, especially if it means reducing a significant amount of time.
If you’re repeating the same task over and over again, you should seriously consider if there is a way to create a system that automatically completes that task for you.
For example, if you have a routine report that you need to generate every month, think about how it can be automated. If the data is already in the system, this may not be very difficult.
Integrations, bank reconciliation, invoice entry, recurring journals can become simple with the right system.
3. Make sure your team understand why it’s important to close more quickly
The faster you close, the more time your team has to support your organisation.
Your team will likely push back if they are being told to do more, so you need to be able to show the benefits of closing faster.
To help explain the benefits, look at how much time your team spends on operational tasks outside of closing.
This can help you better explain the benefits of closing more quickly.
4. Cross-train staff on critical tasks
If someone is on holiday or off sick, you need someone else to step in to carry out tasks efficiently.
But how will they carry out the tasks if they don’t know what to do?
By cross-training your team on critical tasks, you can ensure that there is still someone who can perform those tasks if needed.
The more your team understands the whole process to close, the easier it’ll be to collaborate with each other, and ultimately, the less time it’ll take for them to carry out tasks in the event of an absence.
5. Spread tasks throughout the month
Try splitting up your monthly tasks throughout the month. That way you can work a little at a time without feeling overwhelmed.
Some of your month-end tasks can be completed or at the very least started before the end of the month.
Prepare routine journals in advance and fine-tune them at the month-end. Close low volume accounts early.
This can also help you identify any risks so that they can be addressed throughout the month, rather than at the last minute when it’s too late.
6. Maintain your accounts and segments
This one might seem obvious, but it’s surprising how many finance teams neglect this.
If you have a lot of inactive accounts, you should consider reviewing them each month as part of a regular review process.
Close accounts if they’re no longer in use. Also, limit access to segments if they’re no longer valid.
The more you can do to maintain your accounts and segments, the less hassles you’ll have towards closing.
7. Complete other tasks early
Whether it is payroll, payment runs, or anything else, aim to complete as much work upfront as you can. If possible you should move them out if you can.
This gives you and your team the time and freedom to start your month-end close early and means you won’t have the stress of trying to finish it at a crunch time. This can go a long way in helping close your month-end faster and more accurately.
Finance is a department the organisation needs to function smoothly. So it’s essential that your team is operating as efficiently as possible if you want month-end close to be less stressful for everyone involved.
In our survey, we found that 44% of finance teams complete month-end on day 5 or before. This goes to show that early close is possible.
By following these steps, you should be able to avoid problems and reduce the stress and time of closing at the end of every month.