The end is nigh and the impending doom is real. Your recurring nightmare--sitting at your desk with a pile of financial documents, tasked with coordinating your company's year-end close process--is just getting started. The reign of terror no one seems to have the power to stop--missing receipts, misplaced invoices, human error, manual data entry, broken telephone across departments--grips you over and over again.
It's time to put an end to your year-end close nightmares once and for all. Read on to discover how you can speed up your year-end close process with manageable steps.
Save time later when you break up the year-end close process into parts of a project with monthly and quarterly reviews.
Use templates and tools already created to expedite your process through Vena to save you time and money.
Reflect on past experiences to guide your future planning and reporting.
Frightening Problems With Year-End Financial Close
Are problems with your year-end close process filling your days and nights with terror? You're not alone. Not only are these problems frightening, they're actually quite common.
Here are the most common problems finance teams face:
Undefined Process: You may lack the formalised process to gather the necessary information and break the task into manageable parts.
Lack of Automation: You may do all or most of the process manually, which takes time, expertise, and unavailable collaboration.
Missing Data: You may struggle to find the information you need to complete the financial end process properly and efficiently.
Participation Overload: You may realise that there are too many cooks in the kitchen without properly assigning tasks among participants to get the job done.
Finishing Too Soon: You may make errors that you'll need to review after submitting your reports.
How To Speed Up the Financial Close Process
When it comes to improving your financial close, take a step back and plan for success. Here are seven steps to accelerate your year-end close:
1. From Fright to Right: Be Prepared With the Right Mindset
Mindset is the foundation for every assignment or project. When your mindset does not align with the end goal, there is a mismatch. Instead, focus your mindset early on what the project entails.
Use your whole team from start to finish. Set a meeting to plan, use past experiences and focus on new goals.
"An end-of-year analysis of my company is tradition. At the end of every year, I plan a meeting with my partners and employees to discuss the pros and cons of business operations during the prior year. I then agree with the whole team on a revised course of action to achieve a better outcome in the upcoming fiscal year. Ensuring your team is chasing a common goal is key!"
As you know, communication is vital to a company's success. The year-end close process is a large undertaking and many players are in the game. Establishing and maintaining communication with the team and external stakeholders is critical for efficient development. Communication not only speeds the process along, but it also creates accountability for each step.
"Business moves at the speed of light today. If you had waited until December 2020 to evaluate last year, you would have likely missed some critical pivots. We operate on a continuous feedback loop which allows for our KPIs to have constant accountability and responsiveness with an eye toward leading indicators so that we can be nimble and proactive. A year in review is a thing of the past."
3. Piles to Files: Organise Your Financial Documents Throughout the Year
Don't wait to gather your financial documents. Get organised from the beginning and maintain organisation throughout the process. Collect information monthly to avoid last-minute stress that can slow down your process.
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4. Get Ahead of the Game
Connect with your accounting department throughout the year and include them in the process. Otherwise, they may not be available to review your reports timely, as many additional projects culminate at the end of the year. Engage your accountant team throughout the entire process to avoid moving ahead with errors.
5. Embrace Automation Without Fear
You're slowing down the process if you're manually writing all or large parts of your reports. Why reinvent the wheel? Use online templates and tools to minimise your time spent on calculations. This also provides accountability for errors, as automation checks your work throughout the process.
6. Break Down the Process as a Project
One way to improve your project process is to conduct monthly strategy meetings. This takes an otherwise daunting task and simplifies its parts. You spend less time and energy on your year-end close if you break it up into smaller subprojects throughout the year. Then, set quarterly meetings to review your team's work.
"An end-of-the-year review can be powerful, but I've found monthly or quarterly reviews to be more effective for my business as it allows for faster pivots. I review all financials, staffing, any major decisions made, client success, wins and opportunities. For any areas we could improve on, I then immediately seek out solutions on who and what could help us in the next month or quarter.
What challenges did you face last year or the year before that? Reflect on the past to plan and report for the future.
"It's imperative for entrepreneurs to do an end-of-year performance review. Lately, unforeseen world events are causing major disruptions in what we do. In 2020, it was COVID. In 2021, we faced supply chain issues. Supply chain issues caused revenue to be pushed into later periods, completely destroying budget cycles. Reassessing lessons learned to make adjustments for the coming year is critical.