Financial Close

What is Account Reconciliation? Account reconciliation is the matching and validating balances in the general ledger (GL) to external and internal sources or other independent calculations to ensure that month-ends and year-ends are closed accurately. (Click here to learn more about our account reconciliation software) Data sources used to remediate and reconcile account balances include sub-ledgers for HR and fixed assets, bank statements and accounts receivable and payable schedules. For both internal and external sources, every balance must match its corresponding account in the GL. Intercompany transactions, currency exchange rates and various non-cash activities only generate more complexities in an already complicated, time-consuming process. A well-planned account reconciliation process includes an audit trail, workflow automation and supporting information to ensure that all accounts balance out. But at the same time, the process is transparent and clearly justified for everyone involved. The Ultimate Goals of Account Reconciliation In accomplishing these objectives, proper account reconciliation: Gives management a timely and accurate picture of last period’s performance. Demonstrates the organization’s financial integrity to internal and external stakeholders—including accurate and transparent regulatory reporting. Provides real-time data or “actuals” to the accounting and financial planning and analysis (FP&A) teams to perform variance analysis and re-forecasting. Internally, proper account reconciliation also provides process benefits, including reducing the time it takes to close, consolidate and prepare financial statements for every reporting period while improving and automating internal control measures. What’s more, it’s a process that’s ripe for automation—but frequently done in a manual, time-intensive and error-prone manner. What Happens Without a Proper Account Reconciliation Process? Without a proper, automated account reconciliation process, organizations may encounter a range of problems arising from: Large numbers number of accounts and corporate entities and the complexity of sub-ledgers and other systems involved—from payroll systems to bank statements. Bottlenecks in the period-end close from unexplained exceptions—accounts requiring adjusting entries to balance out—that prevent timely and accurate identification, review and reconciliation. Fraudulent or negligent accounting practices that go undetected due to unreconciled accounts, poor internal controls or a lack of supporting documentation, commentary or calculations. Account reconciliation is the bedrock of accurate, efficient, compliant and timely financial statement delivery. Account reconciliation must be treated as a priority and critical path in the period-end close process to provide a complete and accurate picture of a company’s financial performance. Learn more about Vena Recap: Accounting 101 The origins of account reconciliation and accounting itself date back to the 15th century. Accounting has a long history, despite the fact that the need to earn CPE credits for CPAs were only established in 1996. The basic premise is an accounting fundamental: for every journal entry posted to the GL, debits and credits must be equal, matching up with any sub-ledgers or supporting transaction records. A standard transaction entered into the general journal, by definition, balances out; it’s reconciling those against any number of sub-ledgers and external records that makes the process complicated. Today’s modern accounting, enterprise resource planning (ERP) and GL systems have built-in controls to prevent unbalanced journal entries from being posted to the general ledger. The tricky part comes with exceptions—accounts that don’t match their corresponding sub-ledgers or other transaction systems. Exceptions require adjusting entries to balance out. This is where accounting teams can spend a huge amount of time—reviewing, investigating and finding the supporting explanations and calculations to make the appropriate adjusting entries for each exception to ensure an accurate, supported reconciliation. Reconciliation Processes The reconciliation process happens at the end of every reporting period—monthly, quarterly and annually—to ensure every GL account matches the balance of its corresponding sub-ledger or external transaction system. The process typically involves three distinct stages once the initial books are closed, and trial balances are created for the period. Four-step account reconciliation process Reconciling the trial balances for accounts in the general ledger with corresponding accounts in sub-ledgers or other secondary transaction systems, primarily including: Sub-ledgers – two of the most common include payroll or human resources information systems (HRIS) and fixed asset tracking (FAST) systems. Bank statements – for the cash or bank reconciliation process, it’s critical that the balance in the bank matches what the cash balance shows on a balance sheet. Roll-forward schedules – the closing balance for every account (e.g. depreciation, prepaid assets, accounts payable and receivable) at the end of one period should equal the opening balance at the start of the next one. Adjusting entries and ensuring they’re all reviewed, investigated and approved before posting to the GL. Reconciling and making adjusting entries are complicated processes and where most bottlenecks in the close process take place. This is where accountants spend the bulk of the close cycle, acting as detectives and internal auditors to find the source of every exception and the supporting information to explain them. Providing supporting calculations and documentation where required (e.g., if an account doesn’t balance by a wide margin, explain why). External auditors, regulators and even senior management all need trusted numbers and transparency and documentation to find the sources and explanation for every exception quickly. Preparing financial statements, regulatory filings and other reports for the period. And with account reconciliation done right, the results should be based on 100% reliable numbers. The more reliable your numbers are, the more confident your internal and external stakeholders will be. The importance of proper documentation Documentation of the entire reconciliation and financial close process is necessary for internal visibility. Not to mention, also for auditors and 21st-century reporting regulations to satisfy: Reporting regulations such as Sarbanes Oxley (SOX) prescribe what needs to be reported and the process documentation needed to accompany them. Transparency and visibility requirements of external auditors for faster auditing with greater confidence. Consistency and continuity of processes, ensuring that they are maintained across departments and over time. Learn more about Vena Why Is Account Reconciliation So Important? The month-end close, adjusting entries, posting to the GL and generating financial statements and reports are only part of the story in what’s referred to as the full-spectrum of FP&A activities. Gone are the days when finance and accounting functions existed in silos; now, they feed each other to learn from past performance, optimize present performance and maximize performance in the future. Still, it’s only after undergoing rigorous reconciliations and analysis that it’s possible to prepare reliable financial statements with confidence. Account reconciliation is a critical item in the financial close process because: It’s the foundation for most internal controls that are crucial for protecting the company’s assets. It’s required before month/year-end reports, and financial statements are issued. Properly documented account reconciliation provides full internal visibility and is essential for meeting regulatory reporting requirements with confidence. Account Reconciliation and Full-Spectrum FP&A Every business needs to close its books. It’s not an option. But the larger the business, the more shareholders it has, the more complex its accounts and operations, the more complicated the process becomes. And more importantly, having a reliable, streamlined and automated account reconciliation process becomes, too. Best practices dictate that companies close their books monthly to report on the previous month’s financial performance (or actuals), allowing management to stay on top of the company’s financial health and meet its reporting obligations. A critical part of the month-end close includes account reconciliation—ensuring the actuals are accurate, reliable and timely. The modern, full-spectrum approach to FP&A depends on the delivery of these actuals so that the more forward-looking and planning-based phases of the FP&A cycle can take place. Actuals are needed for: Creating rolling forecasts, analyzing variances between their actuals and forecasted numbers and determining any course corrections required of a company to stay on track to meet its performance targets. (Click here to learn more about rolling forecasts to learn more about rolling forecasts) Providing FP&A teams with the actuals, insights and credibility to play a more strategic role in the organization and using these data to inform smarter business decisions and plans. Continuous monitoring of financial and operational metrics to improve efficiency and accuracy with each iteration and provide fully transparent performance reports to stakeholders, auditors and regulators. Want 75% more time in your day? Vena automates time-consuming financial close processes, e.g., data collection, account reconciliation and inter-company transactions. Manual Reconciliation vs. Automation Account reconciliation is often the bottleneck in closing the books on time. Numerous accounts have to be analyzed and reconciled each month. When performing these reconciliations manually, the sheer volume can make the task seem insurmountable. Automation is the key here. In fact, with the right tools and technology, it’s not uncommon to reduce the time to complete the financial close by 50% or more. (Visit this link to learn how we did just that for Capstone Infrastructure) With the proliferation of financial process automation systems today, it’s possible to automate unnecessarily manual and time-consuming tasks across functions and applications. This is particularly important in: Connect your GL, sub-ledgers, and other source systems directly to the software you use for account reconciliation and feed into budgeting, forecasting, and other FP&A software functions. Identifying exceptions to review, adjust, reconcile and post to the GL in final form. Facilitating workflow automation throughout the process of identification, remediation and reconciliation. The following areas—each involving a high degree of manual effort to balance against the general ledger (GL)—make a compelling case for automating the account reconciliation process wherever possible: Sub-Ledger Balances Balancing the general ledger and sub-ledgers is a key control automated account reconciliation software that will post matching entries without manual review. When automated, it will take the manual effort out of identifying exceptions when accounts are unreconciled. This ultimately frees up hours or days of your accountant's time that they would otherwise spend posting accounts that need no reconciliation and searching for those that do. Instead, automated account reconciliation allows your accounting teams to focus where their expertise is most needed: investigating, remediating and reconciling only the GL accounts that are automatically flagged as exceptions for being out of balance with their corresponding sub-ledgers. From a technology standpoint, this identification step requires account reconciliation software that integrates with disparate, companywide sub-ledger systems—the most common being payroll and human resources information systems (HRIS) and fixed asset tracking systems (FAST). The value of automation is even more apparent if your organization has subsidiary companies or separate but related corporate entities. As the number of these entities grows, so does the complexity of the account reconciliation process and the overall volume of data, accounts and sub-ledger systems involved. Bank Reconciliations The bank reconciliation—or cash reconciliation—is the similarly time-consuming process of reconciling transactions when they exist in your general ledger but not your bank's reporting systems or vice versa. For example, a check is cashed at the bank before the corresponding journal entry is made in your accounting software. Automating the bank reconciliation process delivers much the same value as reconciling sub-ledger exceptions. Automation frees up your accountant's time from searching for those exceptions manually by flagging just the transactions requiring investigation and reconciliation. When you have multiple banks, accounts in the thousands and transactions in the millions each month, automation addresses an even greater degree of complexity and magnitude of transactions to review—a process that would otherwise take up days or even weeks of your accountant's time. Roll-Forward Schedules Roll-forward schedules are much the same as sub-ledgers when it comes to reconciliation. But instead of checking GL balances against data residing in other company systems, most schedules are kept in disparate, standalone spreadsheet files. Whether accounts receivable aging schedules or depreciation and amortization tables, roll-forward schedules can involve additional complications, including: Version control challenges when faced with a single schedule exist in multiple spreadsheet files across your organization. As with sub-ledgers, each schedule typically includes pre-determined rules for what supporting commentary, documentation, and calculations need to accompany certain adjusting entries (e.g. if balance differences exceed an acceptable threshold) before posting them to the GL. The basic check and balance of ensuring the closing balance of one period equal the opening balance of another. From maintaining version control and eliminating unnecessary manual review to configuring rules and GL integrations, the value of automation to roll-forward reconciliation should be clear to anyone who’s performed the process before. Workflow Automation If manually reviewing accounts and tracking down supporting documentation for exceptions weren’t time-consuming enough, most companies have month-end close and reconciliation workflows they follow to close out each period. Depending on the number and complexity of accounts, entities and the overall business, simply carrying out this workflow—completing the review step before forwarding it to another party for approval, for example—can be just as tedious as the reconciliation itself. Workflow automation allows checklists, roles, rules and processes for review, reconciliation and approval (or rejection) to be defined once and repeated regularly. It automatically marks adjusting entries as complete and routes them to the appropriate colleague for approval before posting, for example. And once built, workflow automation takes virtually all the manual effort out of the process. Automatic notifications, real-time status reports, routing tasks to the right roles, and posting transactions to the GL. These things, when complete, all go even further to make the account reconciliation process more accurate, efficient and rewarding for those involved. They also bolster the confidence of executives and external stakeholders in the numbers resulting from the process. Learn more about Vena Account Reconciliation Software Solutions There are numerous software options available to finance and accounting teams. And they are all designed to better manage and streamline the account reconciliation process! It’s not uncommon for smaller companies to use a combination of their accounting/GL software and a library of Excel spreadsheets. More sophisticated options for larger companies include: Point solutions such as Blackline (NASDAQ: BL) and Trintech focus solely on consolidations and account reconciliation. These are often trying to separate traditional FP&A solutions for budgeting and planning. GL reporting and account reconciliation modules from ERP “mega-vendors” such as Oracle, IBM or SAP. Modern, full-spectrum FP&A platforms offer everything from account reconciliation to scenario analysis through a single system. Ask yourself... Even if you have a modern ERP system in place that offers account reconciliation functionality, questions you should ask yourself include: Does the GL/ERP system post matching entries automatically? Is it flagging only the accounts that need review, remediation and reconciliation on the part of the accounting team? Is there a quick and intuitive way to explain each exception to management, auditors, regulators and other stakeholders—whether through external documentation, supporting calculations or references to changing exchange or interest rates, as just a few examples? Do audit trails and supporting calculations/explanations provide accounting teams with the ability to post newly reconciled/adjusted entries into the GL with confidence? The Excel Problem Aside from ERP systems, standalone Excel spreadsheets have played a dominant role with accounting and FP&A professionals for more than three decades. Based on survey data, about two thirds of finance professionals still rely heavily on standalone spreadsheets for accounting processes. Even financial close management and FP&A software with “Excel-like” interfaces have been unable to dethrone these standalone spreadsheets. Today, companies need to respond quickly to any situation with accurate, real-time information that Excel, on its own, cannot deliver. The main problems with Excel on its own include: There’s no single source of data, supporting calculations or comments. There are only disparate spreadsheets, which can lead to errors from discrepancies and version control issues. Excel lacks any robust workflow automation, version control, audit trails or underlying database. And simultaneously, the ability to scale to the demands of today’s mid-and large-sized companies. Processes that rely on error-prone data can easily lead to costly consequences for any business—particularly publicly traded or otherwise regulated companies. The Solution Whether choosing a point solution or full-spectrum FP&A platform for account reconciliation, there are three essential ingredients of a software solution—and they’re all related to automation: Connecting directly to source systems—from your GL, ERP systems or HRIS. Then, GL and sub-ledger accounts that match can be posted automatically. This also allows FP&A teams to pull live actuals into reports, forecasts and more. Automatically identifying accounts that don’t match. This frees up time by enabling teams to focus on the issues that require investigation and review. Facilitating automated workflows to eliminate manual work through all stages of the process, from review, remediation and reconciliation, to the creation and distribution of financial statements, management reports and self-serve analysis tools. For numerous reasons, the ideal solution is to pick a full-spectrum FP&A software solution. One that spans the FP&A cycle—from closing the books and regular forecasting to variance and scenario analyses and internal/external reporting. Today’s leading FP&A or corporate performance management (CPM) systems include workflow automation, version control, audit trails and other measures required for transparency and control. FP&A software powering your plan to grow Drive smarter, more data-driven business decisions with numbers you can trust. Last but not least, and not common enough among FP&A software, it’s vital to pick a solution that integrates directly with—and doesn’t try to replace—Excel and all its powerful functionality, even extending to add-ons like Power Pivot and Power BI. The familiarity finance and business users have with Excel goes a long way to speed up adoption. And ultimately, it contributes to better business-wide decision making and planning. Combined, these features provide companies and their account reconciliation teams benefits including: Financial statements, audits, regulatory and management reports based on a single source of trusted, accurate numbers with guaranteed data integrity. Better visibility for management, auditors and regulators into the processes and supporting calculations—the story behind every adjusting entry. Allowing finance teams to spend less time inputting data and more time analyzing, modeling and focusing on strategic, decision-driving roles. The net result? More productive teams, more accurate numbers and, ultimately, a better bottom line—all from picking the right account reconciliation software. Full-spectrum FP&A options streamline account reconciliation, empower finance teams and give leadership the tools and confidence to make the right decisions—not just in finance but across the organization. Did you learn a lot about account reconciliation in this post? Here are three more to read next: How to Overcome the Barriers to Automated Account Reconciliations This is Why There’s No Such Thing as ‘Good Enough’ Account Reconciliation Why Businesses Need To Focus on Higher Revenue per Employee Ready to start your own growth journey?

What does your month-end financial closing process look like? Do you have a system in place or do you “wing it” and hope for the best? Are you searching for a better way of doing things next month? Never underestimate the significance of monthly closing and the importance of a month-close checklist.  Keeping track of what happened in the previous month can help position your company for future success. Month-end closing ensures that you have information about your company's financial situation and are ready to report on those figures. It is critical when making short-term decisions and helps your teams work towards your organization's long-term goals.  Plus, accurate monthly reporting makes year-end closing much easier to understand. The month-end closing process is critical to any business but can be very time-consuming. Creating the right month-end close checklist allows your team to break out of reporting silos and to focus on more strategic business locations.  💡Key Takeaways:      Your month-end close process should include recording incoming cash, checking your AR records and reconciling all accounts, including petty cash.  Track all your business transactions, ensure accurate records and mitigate fraud risks. Remain up to date on the financial well-being of your organization.  Your month-end close checklist should include categories, task descriptions, task prioritization, names of the preparers and the reviewers, and offer a full review of financial statements. The benefits of a month-end close checklist are error reduction, improved reporting results, increased efficiency and preparing your company to be audit-ready. Common mistakes companies make during their month-end close process are duplicate data entry, unstandardized processes, delays in information and lack of automation.  What is the Month-End Close Process? The month-end close involves your finance and accounting teams collecting, reviewing and reconciling the previous month's transactions and financial activity.  It provides compliance and financial accuracy while preserving your data's integrity for analysis planning. Spending and trading activity are somewhat predictable, but each month can introduce new issues that you and your teams need to consider.  That's why we emphasize a solid flow in closing each month, from when the team begins gathering information to crossing the finish line with the final financial report.  This month-end close checklist outlines not only the transactions, but also the growth of the company for each period. Keep in mind that every basic task has many sub-steps. Also, the timelines depend on the specific situation of your company. This process involves several steps your team will complete over several days. What Are The Key Steps In The Month-End Close Process? 1. Prep Work Email supply about unpaid invoices. Contact your sales representative to ensure no revenue loss and that your sales pipeline metrics are correct. Ensure all manual entries are accurate (but don't worry about checking automatic posts at this early stage.) 2. Reconcile Cash Check and reconcile cash. If the cash is in transit, note its destination and relationships. We recommend double-checking all payment accounts to ensure everything is organized (including petty cash) and properly pooled. Review Account Operations: Double-check and adjust accounts payable (AP) and accounts receivable (AR). 3. Accrual Estimates Review all month-end accruals and track coverage for the next month. Accounts for prepaid expenses such as income. 4. Preliminary and ASC 606 Reviews Review all manual and automated data flows related to revenue recognition and commissions. Test for validity and conduct preliminary walkthroughs with your team to ensure the information makes sense and is consistent across reports. 5. Conduct Flux Analysis and Adjust We denote this as "flexing your financials." Review and double-check monthly and quarterly month-end closing results to see how the report compares to the company's growth goals and expectations. If something looks abnormal and needs tweaking, it may grow over the years. ‍ 6. Wrap Up and Deliver Treat these reports as if they are already for issuing. Double-check your reports once more and then deliver them to the executive teams for reviewing and analysis. Why Is The Month-End Close Process Important? The month-end close lets your teams track all your monthly business transactions. It is essential to ensure that your accounting data is as accurate and complete as possible. Accurate monthly data feeds several other accounting procedures. For instance, having an accurate monthly report makes year-end closing much more straightforward. End-of-month closing benefits include: Create accurate and up-to-date financial records. Organize annual financial statements and save time filing tax returns. Month-close reporting simplifies the process, making it easier to audit. The financial close process identifies areas that need improvement. Along with that, you can make more informed decisions based on your company's financial activities. It positions your executive team to make cash allocations that benefit each department of the company. The Ultimate Month-End Close Checklist: 1. Record Incoming Cash Incoming cash comes in many forms, such as invoice payments, revenue and loans. Record all funds that your company received during the month. This is also a good time to do the following: Review outstanding deposits Verify that all invoices have been sent Count cash on hand Manually recording incoming cash and taking these other steps can be time consuming and stressful. It’s best to use a software application that automates these tasks. This makes for a more efficient and more accurate month-end closing process.  2. Review Accounts Payable Depending on the size of your company and the number of monthly transactions, you may find it difficult—if not impossible—to record transactions as they come to you. But that’s no excuse for mistakes. You still need a system for organizing and maintaining accurate records.  A review of accounts payable records should include, but is not always limited to: Gathering all necessary records Determining if there are any accounts payable that have been paid  Checking your records against accounts payable to know what has and has not been addressed  It’s easy to put this step off until the end of the month, but it’s also a costly mistake. Automation software can help you better track accounts payable throughout the month so that there’s less pressure on you as the fiscal calendar turns. 3. Reconcile Accounts Don’t fall into the trap of assuming that you (or anyone else) didn’t make any mistakes during the month. Even the most experienced and knowledgeable financial professionals slip up now and again. This is why it’s so important to reconcile all of your accounts. In short, this is the process of comparing your records to account statements, such as from your financial institution. If the numbers match, you’re in good shape. But if they don’t, you have some work to do. It’s time to dig deeper to pinpoint the reason for the difference, you can use this bank reconciliation template to help. Make the process by putting all your accounts into one of these three categories: Bank accounts (checking and savings) Bank loans or leases (such as for equipment or real estate) Accrued or prepaid accounts It’s generally best to start with bank accounts, but it’s most important to implement a reconciliation system that works for you.  Note: If you neglect to reconcile accounts, a simple mistake this month can grow into a bigger problem next month.  4. Review Fixed Assets Think of fixed assets as items that add value to your company. Examples include work vehicles, office equipment and real estate (buildings and undeveloped land). Intangible assets also fit into this category, including things such as trademarks, patents, domain names and brand names. Fixed assets are long-term items that don’t easily convert to cash. Instead, many of these assets generate monthly expenses in the form of depreciation, repairs or amortization. For example, machinery—such as for manufacturing products—is imperative to the success of your business. It’s also valuable. However, over time, you can expect this machinery to depreciate.  During your month-end closing process, record any expenses associated with fixed assets. 5. Review All Financial Statements This may be the last thing you do, but it requires your attention nonetheless. Start by reviewing these financial statements: General ledger Profit and loss statement Balance sheet Income statement Cash flow statement A thorough review allows you to feel confident in your month-end close. It also sets you up for success the next month.  If you find any errors or areas of concern—such as overspending within a specific department—address them right away. 4 Benefits Of a Month-End Close Checklist Understanding why month-end close processes are vital to business is the first step in preparing a checklist. Before we discuss the common errors people make with their month-end closing process, let's review the benefits of having a month-end close checklist for closing out the month. 1. Reduces Accounting Mistakes  Accounting reports contain a large amount of data and are subject to duplicate entries, omissions and other errors. These errors may be legitimate or an attempt to cover up fraud or theft. A month-end checklist helps accountants remember what they might otherwise skip. 2. Improves Results From Accurate Reporting   Accurate reporting allows top management to identify and correct performance problems. In addition, creditors, investors and analysts can assess the company's overall performance and financial condition.  By implementing the checklist, the accounting department can produce accurate financial statements on which all stakeholders can rely. A month-end closing checklist helps eliminate errors and omissions and helps ensure that critical balances, such as cash and inventory, are accurate each month.  3. Increases Efficiency Among Your Teams  Report generation takes a long time due to large amounts of data. However, delays in issuing financial statements may delay management's awareness of significant performance and liquidity issues that need addressing sooner. End-of-month checklists reduce the time it takes to organize and submit internal financial reports. A well-thought-out to-do list keeps accountants and management on the same page when it comes to receiving financial reports.  4. Prepares Your Company for an Audit  In addition to your company's audit readiness at the end of the month, a checklist also helps you prepare your annual financial statements. Implementing a month-end closing checklist increases efficiency and accuracy, reducing the time, effort and expense involved in preparing for year-end audits. Common Month-End Close Mistakes - And How To Avoid Them 1. Duplicate Data Entry  One of the challenges we face in completing month-end closing tasks is that manually entering data is time consuming. While you may have multiple systems in place to help run your business, it is more likely that they will ultimately run independently.  The team must manually upload data to the accounting system for the accounting department to process month-end goals. Unfortunately, this process is time consuming and error prone, so finding an automated solution is essential. Even after entering data into the system, your accounting team still needs to ensure the information is accurate across all platforms. Ultimately, this manual process exhausts resources. When teams manually enter data into the system, there is a high risk of mistakes. Finding a system that can automatically transfer data from one system to another is a great way to smooth out the month-end closing process. Even small mistakes in financial statements can lead to big problems when the information rolls into planning. 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. This necessary time delays the release of monthly financial statements as your accounting team must spend time reviewing completed work. 2. Unstandardized Processes  A month-end closing process should generally include the same steps each month. However, manually integrating data from different departments can present new challenges each time. Standardizing processes ensures accurate and consistent results month after month. Standardized processes help meet month-end closing goals, even when your accounting team is understaffed. On the other hand, without a systematic way to balance the books, you may encourage employees to look for shortcuts to their responsibilities.  These workarounds increase the likelihood of errors in your financial data, which can cause problems in the future and take hours to document a reproducible procedure each month. Create checklists of tasks and activities ordered by date.  Simplify your chart of accounts. Also, review journal entries to determine whether you have taken materiality (significance) into account. If possible, increase the dollar limit for certain transactions to avoid pointless recording.   3. Late Financial Data  Another challenge you may face is the speed of producing monthly financial reports. In other words, how long does your accounting department need to prepare statements after the end of the month?  If the process takes too long, you need a method for improving the efficiency of the month-end closing process. Not having access to information when needed makes it difficult to make decisions and plan for the future. It is challenging to manage a business without readily available financial statements. Without the right tools, your organization's processes will become less effective and you will lose insight. Find out why data from a particular source experience frequent delays. Other departments and providers may not understand the need for timely information.  Employees may need certain types of training or refresher. Another option is to reconcile important accounts more frequently. Doing so reduces your reliance on last-minute records from external accounting.  4. Understaffed Accounting Teams  While you may lack the resources to hire more staff, training some employees for crucial steps in the closing process may be a viable option. As long as an experienced financial professional or manager takes responsibility for month-end closing, this alternative can work for your business. You will also need to evaluate fraud concerns. Mutual staff training can also provide separation of duties and improve a company's internal control environment. 5. Lack of Automation  Automation is significant in today's business world. Don't rely on spreadsheets and manual processes that don't allow for timely revisions and corrections to your accounting system. Identify tech-savvy associates who can explore executive data needs and current software reporting capabilities. Ask a consultant or cloud coach to advise you on your current processes and the potential for step-by-step automation. Is That All You Need To Do? The steps in our guide to the best month-end close are a good start to any month-end close process checklist, but there may be other steps to add. Consider the following: Review revenue and expense accounts Count inventory Review petty cash The more times you go through the month-end close process, the better you’ll understand what steps to take and how to work more efficiently in the future.  Conclusion Are you confident in your ability to take these five steps? Do you believe they’ll improve your month-end close process? 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.  Don’t ignore month-end close best practices any longer. A few simple steps can have a profound and positive impact on your business.  Want 75% more time in your day? Vena automates time-consuming financial close processes, e.g., data collection, account reconciliation and inter-company transactions.

Never underestimate the significance of monthly closing and the importance of a month-close checklist.  Keeping track of what happened in the previous month can help position your company for future success. Month-end closing ensures that you have information about your company's financial situation and are ready to report on those figures. It is critical when making short-term decisions and helps your teams work towards your organization's long-term goals.  Plus, accurate monthly reporting makes year-end closing much easier to understand. The month-end closing process is critical to any business but can be very time-consuming. Creating the right month-end close checklist allows your team to break out of reporting silos and to focus on more strategic business locations.   💡Key Takeaways:      Your month-end close process should include recording incoming cash, checking your AR records and reconciling all accounts, including petty cash.  Track all your business transactions, ensure accurate records and mitigate fraud risks. Remain up to date on the financial well-being of your organization.  Your month-end close checklist should include categories, task descriptions, task prioritization, names of the preparers and the reviewers, and offer a full review of financial statements. The benefits of a month-end close checklist are error reduction, improved reporting results, increased efficiency and preparing your company to be audit-ready. Common mistakes companies make during their month-end close process are duplicate data entry, unstandardized processes, delays in information and lack of automation.  What is the Month-End Close Process?   The month-end close involves your finance and accounting teams collecting, reviewing and reconciling the previous month's transactions and financial activity.  It provides compliance and financial accuracy while preserving your data's integrity for analysis planning. Spending and trading activity are somewhat predictable, but each month can introduce new issues that you and your teams need to consider.  That's why we emphasize a solid flow in closing each month, from when the team begins gathering information to crossing the finish line with the final financial report.  This month-end close checklist outlines not only the transactions, but also the growth of the company for each period. Keep in mind that every basic task has many sub-steps. Also, the timelines depend on the specific situation of your company. This process involves several steps your team will complete over several days. Let's review these processes: Prep Work: Email supply about unpaid invoices. Contact your sales representative to ensure no revenue loss and that your sales pipeline metrics are correct. Ensure all manual entries are accurate (but don't worry about checking automatic posts at this early stage.) Reconcile Cash: Check and reconcile cash. If the cash is in transit, note its destination and relationships. We recommend double-checking all payment accounts to ensure everything is organized (including petty cash) and properly pooled. Review Account Operations: Double-check and adjust accounts payable (AP) and accounts receivable (AR). Accrual Estimates: Review all month-end accruals and track coverage for the next month. Accounts for prepaid expenses such as income. Preliminary and ASC 606 Reviews: Review all manual and automated data flows related to revenue recognition and commissions. Test for validity and conduct preliminary walkthroughs with your team to ensure the information makes sense and is consistent across reports. Conduct Flux Analysis and Adjust: We denote this as "flexing your financials." Review and double-check monthly and quarterly month-end closing results to see how the report compares to the company's growth goals and expectations. If something looks abnormal and needs tweaking, it may grow over the years. ‍ Wrap Up and Deliver: Treat these reports as if they are already for issuing. Double-check your reports once more and then deliver them to the executive teams for reviewing and analysis. Why Month-End Close Process Matters   The month-end close lets your teams track all your monthly business transactions. It is essential to ensure that your accounting data is as accurate and complete as possible. Accurate monthly data feeds several other accounting procedures. For instance, having an accurate monthly report makes year-end closing much more straightforward. End-of-month closing benefits include: Create accurate and up-to-date financial records. Organize annual financial statements and save time filing tax returns. Month-close reporting simplifies the process, making it easier to audit. The financial close process identifies areas that need improvement. Along with that, you can make more informed decisions based on your company's financial activities. It positions your executive team to make cash allocations that benefit each department of the company. What Should Your Month-End Close Checklist Include?   When you ask someone for a month-end close checklist, it's a heavy-handed request. It's generally a custom process tailored to your organization's specific needs. A month-end close checklist template is a place to build this customized process. Developing a complete end-of-month checklist helps your team get the numbers back to the company as soon as possible and helps them obtain the information with the highest level of accuracy to make better, more informed decisions. Here’s what your month-end close checklist should include: Categories   Categories give you a broad, high-level view of your financial situation. Categories typically include: Cash and Cash Equivalents: Reconcile bank account balances and review all cash transactions to provide the basis for cash flow analysis, financial statements and cash flow planning. Complete journal entries in ERP and save bank and credit card statements for your records. Prepaids and Other Assets: Check the accuracy of your prepaid expense entries and amortization records before the term expires.  When the term expires, complete new prepaid transactions and delete fully amortized transactions. Fixed Assets: If applicable, record ASC842 Lease Amortization and Prepaid Rent. Consider device depreciation and breakdown costs that exceed the activation threshold. Accruals and Other Liabilities: Coordinate invoice payments and reconcile them effectively. Understand sales commission accruals and tie accrual planning to your company's ERP. Payroll and Benefits: Align department-wide HRIS overall salary data in your  ERP. Equity: Recognize stock-based compensation expenses or stock transactions and record them. Revenue and Expenses: Chronicle revenue share for closed deals and record revenue recognition transactions to your organization's ERP. After all income statements and balance sheet accounts are closed, create and review flow statements. General Close and Reporting. Broad categories of additional reviews include account reconciliations, final financial statements and board materials. Task Descriptions   Divide each category into tasks. Doing so will help you learn more about organizing your team to collaborate effectively as they close out the month. Be as detailed as you like, but don't overwhelm your checklist. Dig deeper into your processes and expectations.  Create guides to consider completing tasks or to decide when your team can begin the next step.  Task Prioritization  The more granular the task is, the more time it takes to set a precedent for what information is necessary before moving on to the next task. Our FP&A solution is one way to set task prioritization.  Our financial templates can help you organize time-consuming tasks, such as checking sales records for inaccuracies, following up with suppliers and reconciling unpaid invoices, as preparation and day-one items. This will give you enough time to get a response and delay other tasks as little as possible.  Name Preparers and Reviewers  Collaboration demands transparency. Teams need to know who is responsible for which parts of the month-end closing process. List names in each column to encourage teamwork reports and autonomy at each stage. This way, teams can review tasks as they are completed and perform additional validations before moving on to the next section, continually strengthening report accuracy at each stage. Review Full Financial Statement  Accounting and finance teams know the rhythm of business, like when the vendor pays the bills and when the company pays the expenses (such as salaries and software bills.) Rely on these team members to schedule a holistic review that includes automatic number verification. Reviewers get recorded throughout the process. However, plan to conduct a full review of the report by the sixth day of your month-end close process to account for inaccuracies. 4 Benefits of a Month-End Close Checklist  Understanding why month-end close processes are vital to business is the first step in preparing a checklist. Before we discuss the common errors people make with their month-end closing process, let's review the benefits of having a month-end close checklist for closing out the month. 1. Reduces Accounting Mistakes  Accounting reports contain a large amount of data and are subject to duplicate entries, omissions and other errors. These errors may be legitimate or an attempt to cover up fraud or theft. A month-end checklist helps accountants remember what they might otherwise skip. 2. Improves Results From Accurate Reporting   Accurate reporting allows top management to identify and correct performance problems. In addition, creditors, investors and analysts can assess the company's overall performance and financial condition.  By implementing the checklist, the accounting department can produce accurate financial statements on which all stakeholders can rely. A month-end closing checklist helps eliminate errors and omissions and helps ensure that critical balances, such as cash and inventory, are accurate each month.  3. Increases Efficiency Among Your Teams  Report generation takes a long time due to large amounts of data. However, delays in issuing financial statements may delay management's awareness of significant performance and liquidity issues that need addressing sooner. End-of-month checklists reduce the time it takes to organize and submit internal financial reports. A well-thought-out to-do list keeps accountants and management on the same page when it comes to receiving financial reports.  4. Prepares Your Company for an Audit  In addition to your company's audit readiness at the end of the month, a checklist also helps you prepare your annual financial statements. Implementing a month-end closing checklist increases efficiency and accuracy, reducing the time, effort and expense involved in preparing for year-end audits. Common Month-End Close Mistakes  At the end of each month, the accounting department collects, analyzes and records financial data in a "closing process." When financial professionals perform these tasks in a structured environment, managers receive timely and accurate reports. The financial close helps organizations make strategic decisions and stay adaptive.  Video: YouTube However, month-end closing can create errors and frustrations for many companies. If any of this sounds familiar, it's best not to assume these issues are unsolvable. Begin your streamlining process by addressing the following common issues:  Duplicate Data Entry  One of the challenges we face in completing month-end closing tasks is that manually entering data is time consuming. While you may have multiple systems in place to help run your business, it is more likely that they will ultimately run independently.  The team must manually upload data to the accounting system for the accounting department to process month-end goals. Unfortunately, this process is time consuming and error prone, so finding an automated solution is essential. Even after entering data into the system, your accounting team still needs to ensure the information is accurate across all platforms. Ultimately, this manual process exhausts resources. When teams manually enter data into the system, there is a high risk of mistakes. Finding a system that can automatically transfer data from one system to another is a great way to smooth out the month-end closing process. Even small mistakes in financial statements can lead to big problems when the information rolls into planning. 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. This necessary time delays the release of monthly financial statements as your accounting team must spend time reviewing completed work. Unstandardized Processes  A month-end closing process should generally include the same steps each month. However, manually integrating data from different departments can present new challenges each time. Standardizing processes ensures accurate and consistent results month after month. Standardized processes help meet month-end closing goals, even when your accounting team is understaffed. On the other hand, without a systematic way to balance the books, you may encourage employees to look for shortcuts to their responsibilities.  These workarounds increase the likelihood of errors in your financial data, which can cause problems in the future and take hours to document a reproducible procedure each month. Create checklists of tasks and activities ordered by date.  Simplify your chart of accounts. Also, review journal entries to determine whether you have taken materiality (significance) into account. If possible, increase the dollar limit for certain transactions to avoid pointless recording.   Late Financial Data  Another challenge you may face is the speed of producing monthly financial reports. In other words, how long does your accounting department need to prepare statements after the end of the month?  If the process takes too long, you need a method for improving the efficiency of the month-end closing process. Not having access to information when needed makes it difficult to make decisions and plan for the future. It is challenging to manage a business without readily available financial statements. Without the right tools, your organization's processes will become less effective and you will lose insight. Find out why data from a particular source experience frequent delays. Other departments and providers may not understand the need for timely information.  Employees may need certain types of training or refresher. Another option is to reconcile important accounts more frequently. Doing so reduces your reliance on last-minute records from external accounting.  Understaffed Accounting Teams  While you may lack the resources to hire more staff, training some employees for crucial steps in the closing process may be a viable option. As long as an experienced financial professional or manager takes responsibility for month-end closing, this alternative can work for your business. You will also need to evaluate fraud concerns. Mutual staff training can also provide separation of duties and improve a company's internal control environment. Lack of Automation  Automation is significant in today's business world. Don't rely on spreadsheets and manual processes that don't allow for timely revisions and corrections to your accounting system. Identify tech-savvy associates who can explore executive data needs and current software reporting capabilities. Ask a consultant or cloud coach to advise you on your current processes and the potential for step-by-step automation.  Automating Accounting Tasks Will Speed Up Your Month-End Close   Business owners cannot predict the future until they know the data for previous periods. The longer bookkeeping goes on, the more outdated your financial data becomes, affecting the accuracy of your forecasts. Business partners are no longer satisfied with long reporting cycles and want to get to financial information faster. And you can get insights faster by automating tedious and time-consuming tasks.                                                                                               Image Source: Vena Finance and accounting professionals must find every possible way to automate the tasks of the monthly closing process. It saves time, closes the books faster and contributes to the larger conversation around strategic business goals. Here are some common ways to automate aspects of the month-end closing process: Emails and Reminders  The end-of-month process begins just before the actual end of the month for preparatory work, such as packing pending supplier invoices. Month-end close management solutions and other accounting software provide reminders that automate emails to vendors requesting invoices or overdue items.  Instead of manually going through a list of vendors to contact and sending out reminders, automating the process allows you to focus on more useful preparation work. Marketing Alignment  Understanding the large one-time costs incurred in the pipeline is critical for marketing, accounting and finance accounting integrity. However, attempting to stay up to date via Slack messages, emails or face-to-face meetings can slow things down.  You can use calendaring systems such as CoSchedule, ClickUp and Monday.com to give all the teams visibility into the marketing team's needs regarding upcoming event vendors, product launch or announcement materials.  The calendar serves as a timeline of confirmations and budget projections that you can consider when approaching monthly deadlines or forecasting future deadlines. Purchase Orders  Department heads know the tools and strategies they need to be successful, and these tools and systems may change or get updated by the end of the month. If the finance and accounting departments can't attend meetings with department heads about these updates, there will be holes in the numbers. Purchase order automation fills this gap.  Automating the procurement process with an accounting system like Vena Solutions software streamlines the organization of accruals and payables, increasing transparency and efficiency.  You cannot perfect accrual automation. However, with these tools, you can answer follow-up calls quickly, so you don't have to worry about whether it's an ongoing expense that needs to happen with unusual orders or something you need to write down and forecast for the next month. You can clarify if it's a one-time purchase.  Revenue Recognition and ASC 606 Tracking revenue from product sales and services helps your business stay on track with projected ARR and prepare for future compliant tax filing. Some tools automate revenue schedules to sync documents to your ledger through your CRM integration, enabling you to handle revenue recognition with little manual entry. Board Reports and Fluxes  Efficient monthly financial statements are the foundation for meaningful management reporting and insightful flow analysis. Inaccuracies or delays in closing can derail each of these processes and hurt investor relationships as they struggle to explain the "why" behind the numbers. To provide accurate reports to CEOs and senior management, they need to know exactly where things are. Build a quarterly board deck and run flow analysis to compare period-to-period financials. Vena provides an analytical canvas that aggregates financial and accounting data automatically from various systems of record. This allows you to compare your budget to your actual monthly spending and create future spending projections. Month-End Close Best Practices  It doesn't matter the size of your business, the industry you are in, or the revenue you generate. You have to conduct end-of-month reconciliations and reports. Freelancers and entrepreneurs need to account for the money that runs through their businesses.  Compliance, taxes, seeking investors, you name it, are numerous reasons you need a solid month-end closing process. A checklist will streamline this period for you. Developing a month-end close checklist will reduce how hectic the closing process is and standardize your practices. By following best practices, you can streamline the month-end closing process: Accuracy is always more important than quick conclusions. Please submit financial information within 10 days from the end of the month. Use this time to ensure your data is as accurate as possible before the closing date. Time management helps you meet deadlines and targets. Set goals daily and weekly for your team to complete the end-of-month closing process. Prevent silos from interfering with the month-end closing process. Your accounting team needs to understand every aspect of your business. You need to know who is accountable for what so you can always talk to the right people. Based on the last point, relationships within the business are important. With good relationships, it's easy to ask how people in your organization collect and report data. It also makes it easier to make recommendations when something needs to be changed. Excel at Your Month-End Close With Vena Solutions    The availability and integrity of data determine the effectiveness of any customized month-end closing process. When accounting departments get bogged down with manual data sorting and Excel spreadsheets, they end up in an endless cycle of backward reporting. Vena is not a strictly automated solution, but its ability to integrate data from all systems of record in real-time meets the requirements of both efficient month-end closing processes and better accounting practices. At Vena, our Financial Close Management Software will greatly simplify several steps of your month-end closing, including: Sense-checking ARR numbers according to earnings from previous periods Performing flow analysis and quickly generating variance explanations Reviewing utility accounts and identifying required reclassifications Preparing board materials quarterly Collaborating with senior management and key stakeholders to review balance sheets, cash flow statements and income statements If you want to learn more about how Vena enables finance and accounting teams to take on a more strategic role at your company, you can request a demo of our FP&A software offerings. Or you could download a month-end close checklist template and position your finance team for a five-day closing process.   Excel-erate Month-End Close Vena is the only Excel-native FP&A software streamlining your month-end closing process. Vena offers a variety of solutions for finance professionals that help optimize their month-end close checklist. .

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. 💡Key Takeaways: 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 formalized 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 realize 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!” — Johnny Marines, Johnny Marines Enterprises 2. Foster Continuous Communication 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." — Hilmon Sorey, ClozellLoop 3. Piles to Files: Organize Your Financial Documents Throughout the Year Don’t wait to gather your financial documents. Get organized from the beginning and maintain organization throughout the process. Collect information monthly to avoid last-minute stress that can slow down your process.  How To Overcome 6 Horrors of Financial Reporting Find out how the power of Vena Complete Planning can help you bury these six common issues in the graveyard where they belong. 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 minimize 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 sub-projects 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.  — Marcus Chan, Venli Consulting Group If you have monthly and quarterly meetings in place, the next task is to break each subgoal of the project into achievable pieces. Creating SMART goals allows you to set goals and measure success. Source: BOOM Communications Group 7. Face and Overcome Your Challenges 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. — Adam Coffey, CEO Advisory Guru, LLC The All-in-One Approach To Expedite Year-End Close When you work with the right software, you can take all these steps with help. We work with you to speed up your year-end process through structure, automation and assistance every step of the way.  Vena’s Financial Close Management Software is designed to help you meet your goals efficiently. Here are a few examples:  Centralized Database: Automatically store your data in one location. Workflows: Minimize your inbox size using uploads, approvals and more tools.  Templates: Take advantage of the work done before you to save time. Conquer Your Year-End Close Nightmares Vena is your best resource to simplify your monthly and year-end close processes. End those financial close nightmares and jumpstart your year-end close process today.

Facilitating a smoother and more efficient month-end close is a top priority for financial planning and analysis (FP&A) teams.  During the month-end close, your FP&A team collects, collates and evaluates data to produce operational reports. But a faster, high-quality decision-making process can make your company more competitive in this information economy.  Closing the books faster helps management make decisions faster. So how do you speed up the month-end close? Through a combination of innovation and automation, let’s explore four smart ways to get you started. 💡Key Takeaways: Increasing your month-end close process provides tangible benefits to the company, such as more efficient decision-making and financial analysis. This also reduces the employee hours spent on wasteful processes. To speed up your month-end close, consider graduating from desktop spreadsheets, transferring data currently housed in multiple systems to cloud-based technology and automating any processes where possible.  Businesses seeking to speed up their month-end close face typical challenges, including disconnected data systems, unnecessarily manual processes and adjustment to remote work. Challenges for Financial Teams Speeding up your month-end close may seem challenging. The following roadblocks often prevent FP&A teams from making changes. By implementing innovative technology and automating processes where possible, you can overcome difficulties associated with: Disconnected Systems: Whether you work in a company of dozens or hundreds, data is likely stored across numerous systems, including enterprise resource planning (ERP) software, specialized billing or customer service platforms, multiple Excel sheets and others. This makes it difficult to compile information into one place. Manual Processes: Collecting information from various data stores into one report—your month-end close logs—is tedious. Employees must gather all relevant documents and manually re-enter the data into the new Excel sheet. This is wasteful of employee capabilities and introduces the potential for error. Remote Work: After the COVID-19 pandemic, companies worldwide shifted to what many believed to be a temporary remote work environment. Now years later, it’s clear that telework is here to stay. Although remote work may inhibit collaboration or cross-departmental communications to some degree, new technologies have better connected the home to the office. The Modern Financial Close Panel Join Christine Harms, John Power, Brian Carlson, Martin Noël and Rishi Grover for an interactive conversation to learn how leading finance professionals are transforming their financial close process with automation, data integration, enhanced performance analysis without abandoning Excel. How To Speed Up Month-End Close Speeding up the month-end close makes your business more competitive in the information economy. A better closing process makes the business more agile and adaptable to financial changes. To speed up your month-end close, consider the following strategies: 1. Migrate to the Cloud Finance departments often depend on Excel—and for good reason. The application enables the tracking, analysis and estimation of large quantities of data.  Relying on a bare-bones version of Excel alone, however, is more useful when a business is small or working with little data. Tracking multiple spreadsheets becomes unwieldy once the business grows. For example, the requirement of manual data input makes room for human error. Similarly, sharing multiple spreadsheets via email can cause issues with version control. This back-and-forth can contribute to multiple extra days added to your month-end close.  Instead, consider shifting to a cloud-based solution. This technology automatically takes data from multiple business systems and uploads it into a single data store. The cloud reduces reporting time. 2. Consolidate Disparate Data Just as businesses have multiple data stores and enterprise programs, many businesses also lack a single source of truth that would collect and house that data. For example, financial data necessary for the closing process may spread across multiple enterprise resource planning systems within several business units. When it comes to the month-end close, the FP&A team must navigate multiple platforms. Like using numerous disconnected spreadsheets, this process is tedious and time consuming. It also prevents financial team members from access to quality data until the end of the month. A more efficient process would entail using an FP&A platform that combines numerous ERP systems. That platform can then retrieve data as needed continually. This software then serves as a single source containing all updated information. 3. Automate Where Possible Consolidating data frequently occurs through manual processes also used for making reports and reconciling errors. Any meaningful improvements in this process likely require some degree of automation. To automate effectively, first look at the extended month-end close process. This may include the subledger close, account reconciliation and submission of regulatory filings. With a picture of the entire close process, your financial team can identify areas for improvement via standardization, simplification and connectivity.   Then, implement a detailed close schedule shared among the FP&A team. This can go hand-in-hand with a cloud solution, which may also provide a visible dashboard. These technologies can improve collaboration and predictability. With a mix of intelligent process automation and machine learning, you can reduce month-end close operations from a few weeks to a few days. 4. Place Financial Technology With the FP&A Team Implementing a new technological and automation strategy is less effective if it’s inaccessible to your FP&A team.  A finance department dependent on the information technology (IT) staff is less self-sufficient. This scenario would see FP&A staff calling IT for everything, including: Technological errors Administrative or operational changes System updates or upgrades Bugs or viruses There would be significant delays if this were to happen during the month-end close process.  A better strategy includes introducing easy, intuitive and straightforward solutions so your finance team can self-serve. This makes the FP&A team better equipped, faster and self-reliant while alleviating some of the burdens on the IT department. Speed Up Your Month-End Close With Vena Technology is a must-have when it comes to speeding up your month-end close. However, that doesn’t mean that you need an entirely new suite of performance programs. Faster Month-End Close With Vena, the only native Excel FP&A software, you get a built-in program that enhances what you already use. Vena provides a range of solutions for FP&A teams, like yours, to enhance the month-end close.

Mastering the financial close process is essential for any well-run organization. The first step in doing the important work in FP&A is consolidating your organization's data and reconciling your accounts. But your company's size and the complexity of its structure will influence how difficult that process is.  Many finance professionals find themselves crunched for time trying to complete their close reporting and deliver insights to the C-suite and other decision-makers. One solution to the challenge of time is how you use financial close software.  Whether you’re looking to automate your manual systems or are unhappy with your current software, we've compiled the most important aspects to consider when choosing a financial close management software solution that’s right for you. 💡 Key Takeaways: Financial close software should aim to address two key goals of your process: the speed and accuracy of your reporting. Your financial close management software should integrate well with your source systems and automate the consolidation and reconciliation of accounts.  The financial close software should offer advantages in workflow management to reduce the time spent finding bottlenecks in your process.  A critical feature that financial close software should provide is a way to protect the integrity of your data in case of error or future audit compliance. The Importance of Financial Close Management Software important to understand the general goals you're hoping to achieve from it. Keeping these goals in mind will help you evaluate a solution's potential benefits. For most finance professionals, the financial close process is about refining two constant challenges—the speed and accuracy of your reporting. Improving the Speed of the Financial Close Process Quickly compiling and generating your financial close reporting is essential for responding to changes in your business in real time and making better strategic decisions. Manual financial close processes often take longer because you must rely on team members to provide data and input figures through traditional methods. This creates latency between when the financial data is most representative of the organization's status and when executives or other personnel are analyzing that data to develop a strategy. Your financial close software should provide tools and features that effectively minimize the latency because of the time it takes to close on a monthly, quarterly or annual basis. Ensuring the Accuracy of Your Financial Reporting Equally important to the speed of your close process is the accuracy of the financial reporting you generate. Getting information faster is of little value if it's filled with errors that prevent your team from making informed decisions. As a result, your financial close management software should contain features that will protect the accuracy of your reporting and decrease the potential for error compared to other solutions. Now, let's turn our attention to some of the things your financial close software should do that will improve the speed and accuracy of your financial close process. How To Choose The Best Financial Close Software 1. Will the Financial Close Software Integrate With Your Source Systems? Having disconnected data is a challenge for most businesses, even outside the realm of completing your financial close. Whether your company has a single ERP or uses several different platforms, your financial close software should integrate with them. Without that integration, you’ll still have to rely on manual processes (e.g., email or uploads into unorganized data rooms) to retrieve financial and operational data. What’s more, you might find yourself searching again for new software or considering an overhaul to your other source systems after choosing financial close software that does not integrate well with them. Overhauling systems brings up another important integration concern: support for Excel spreadsheets. Many businesses still rely heavily on Excel for recording transaction data. Your financial close software should respect this reality instead of forcing you to learn a new spreadsheet program. 2. Automation of Your Data Consolidation and Account Reconciliation While having a solution that integrates with your data management systems can save you time retrieving data, automating the close process will take things to another level. The difference between integration and automation is putting your financial data into a form that more closely resembles the finished result of your financial close reporting. Of course, some parts of the close process may always require a degree of manual input. However, the more your close software can effectively automate various tasks, the faster you can do quality control checks and submit reporting for future analysis. Source: Morgan Franklin FP&A software powering your plan to grow Drive smarter, more data-driven business decisions with numbers you can trust. 3. Financial Close Software Should Improve Workflow Management Much of the financial close process is about communicating with all the individuals and groups contributing to the creation of your reporting. CFOs and finance managers are often responsible for managing the workflow between groups. Some of these tasks include: Sending bills and invoices Confirming inventory, fixed assets and other capital Reviewing A/R and A/P Delegating tasks among finance team members Hopefully, your financial close management software will make it easier to collaborate on these items and more. The benefit is quickly identifying bottlenecks in the close process and resolving them with minimal interruption to related tasks. Source: McKinsey 4. Will Your Financial Close Software Protect Data Integrity and Audit Compliance? Your financial close software should greatly reduce errors in your reporting and protect the integrity of your data in case of an audit or other compliance review. Features such as version controls, system alerts, variance analysis and tax assistance can secure your data's authenticity by highlighting oddities, pinpointing errors and recovering prior versions when issues arise so you don't have to start from scratch.   5. Will the Software Standardize Your Financial Close Process? Finally, ask yourself if the solution you are considering will improve the uniformity and standardization of your financial close process. Using templates and other programs that create consistency in your reporting from month to month or quarter to quarter will promote the resiliency of your process. Without standardization in your system, you may risk institutional knowledge being lost if key employees were to retire, change jobs or otherwise leave their positions. Learn More About How Vena Can Help You Close With Confidence Vena's Financial Close Management Software is an end-to-end system built with the goals of speed and accuracy in mind. We want to save you time and allow you to close with confidence, so you can focus more attention on your organization's growth strategy.  Some key features of our software include:  An Excel interface so you won't have to relearn a new system  Version control and the ability to track changes giving you confidence in your audit compliance Connecting and integrating your ERP and GL platforms to automate your data consolidation Access to templates and checklists for improved account reconciliation  Vena Complete Planning is meant for all industries. However, we also offer tailored pre-configured solutions for SaaS, Banking, Insurance, Higher Education, Professional Sports, Healthcare and many others. Transform how your company does its financial close process and see the benefits in your forecasting, analysis and other strategic endeavors. Unify your departments Move your team from different spreadsheets to the same page with all revenue data in one place.

Your financial close process is tried, tested and true. Or maybe you always thought it was—until the world came face to face with a pandemic. The COVID-19 pandemic and the changes it’s brought to the working environment have shed new light on the monthly financial close process. By adding fresh pressures it revealed challenges that have always been there. And some teams have started stepping up as a result, to improve their month-end close and the processes that support it—Vena’s own team included. “It exposed a lot of inefficiencies in our process … things we thought we had down,” Vena’s Chief Finance Officer, Darrell Cox, admitted in Excel at More with Financial Close, part of Vena’s recent Financial Close Livestream—now available on demand to members of Vena’s Plan to Grow platform. “And maybe we weren't taking full advantage of the systems that we had.” At Vena, Darrell admits, the pandemic has permanently changed our financial close process. We’ve added new month-end close best practices and efficiencies that will continue to inform the process even as the workplace starts to return to normal.  And from what we’ve seen, we’re not the only ones.  Adding New Pressures  Remember the days when you’d look over your shoulder and shout a question out to your colleague, maybe asking about a specific transaction or a missing statement? It was probably just standard operating procedure—especially for smaller teams. That is, until workforces went remote and informal communications like these were no longer an option. With teams dispersed and everyone working from their separate homes, suddenly those ad hoc communications weren’t possible anymore. In this new remote financial close environment, teams had to find better ways to communicate. But that was just one new pressure that affected the month-end close schedule. “Proximity was over, distributing information and making decisions got harder and meetings got out of hand,” Darrell said of the new pandemic reality. In this new environment, the need for a more defined month-end close process was revealed—as were several obstacles getting in the way of that happening. And the realities of a remote work environment meant those obstacles suddenly couldn’t be ignored. Become a Plan To Grow Member Watch all the on-demand content from our recent Financial Close Livestream at Plan To Grow. Meeting the Challenges Head On Four common challenges have long been a reality of the financial close process. But the pandemic has inspired many finance teams to tackle them head on—introducing changes that promise to improve their financial close process now and in the future. 1. Poor Collaboration Let’s face it, those over-the-shoulder conversations probably weren’t the most efficient way of communicating with colleagues. They were still helping to facilitate collaboration throughout the financial close process, though. But as the pandemic progressed and companies embraced remote work they weren’t possible anymore—exposing holes in how teams collaborate around their financial close. Without true visibility into data, as well as team tasks and schedules, effective collaboration can be challenging, especially during a remote month-end close. What’s Changing While there was a lot of wasted time on unnecessary (and unwanted) meetings early on in the pandemic, more collaborative technology and processes that facilitate communication have been able to replace that for many organizations. When led by strong leadership that champions their usage across the board, common tools and processes with collaboration built in can help set a new standard and improve communication around the month-end close—whether you’re working remotely or not. In fact, with those in place this evolution promises a more transparent and collaborative financial close environment even once restrictions are lifted.   2. Lack of Automation Speed is essential in any financial close. You want to do a good job and avoid errors, of course, but you also need to get the month closed out as quickly as possible. To accomplish those goals, finance teams have relied on their own processes and shortcuts—and making changes to those has risked interfering with their month-end close timeline. Which means that teams, pre-pandemic, would have balked at any kind of change—even when that change comes in the form of automation that promises to add new efficiencies in the long run. Change has been impossible to avoid over the past two years, though—and keeping up with that change has meant embracing automation tools. What’s Changing The pandemic has revealed “deficiencies in automated processes” across finance—while making those processes especially critical. Not only do team members no longer see each other in person every day, but illness and the Great Resignation have left many teams short staffed, while the reality of living in a pandemic has meant the team members remaining are often overwhelmed. The organizations that have been able to streamline their financial close through automation have been able to remove some of that pressure. By focusing automation efforts on repetitive, overly manual or time-consuming tasks, you can make the entire monthly close process more efficient and begin to standardize it across the entire team. New technologies, such as machine learning and artificial intelligence (AI), can also help create fresh ways to improve your close process.  3. Disconnected Data Disconnected data is a problem for a lot of finance and operations teams, across all processes—including your financial close. Missing and poor quality data is a familiar issue, while tracking down the right data has long been a headache. A pandemic hasn’t made any of that easier, adding new pressures as dispersed teams working remotely try to get the data they need from different sources around the globe. This means it’s become more necessary than ever to get those data problems in order. What’s Changing The pandemic hasn’t solved our data problems. In fact, our 2021 Industry Benchmark Report shows that finance teams are still struggling with disconnected data and are missing a unified strategy on how they create, maintain, control and use data. But the need for remote processes, including a remote financial close, has added new urgency to the need for such a strategy, as well as processes that will ensure the right data is coming to you monthly—when and how you need it. 4. Disparate Systems and Processes If you have dispersed teams working around the world, it’s not uncommon for each of them to be using a different technology and/or processes to close their books. And that makes collaborating, consolidating data and introducing the automation you need even more difficult. All of that was true pre-pandemic, of course, but it became clearer when added to the other pressures that have come to light over the past couple of years. Without a common process and shared financial close software, communication and transparency become even more difficult to accomplish, adding pressure to the month-end close process—and, as a result, your team. What’s Changing The pandemic has forced many organizations to review their existing financial close software in order to improve communication and transparency in this new remote working environment. Implementing a common technology that’s easy to use no matter where you are provides a shared system that dispersed teams can collaborate within. And by working in a common system, an efficient and shared process that everyone can get behind becomes easier to achieve. Establishing a New Normal “Finance processes and communications aren't just about communications between us finance people,” Darrell pointed out in Excel at More with Financial Close. “It's about communication across the business. It's about supporting this process of running our business, delivering timely and accurate information and analysis, supporting and achieving business alignment and making great business decisions.” With the pandemic forcing them to evolve, teams are working together better than ever to achieve that. And the good news is that those processes aren’t going anywhere. Even as restrictions begin to lift, organizations are in a better place to continue working virtually, across disparate teams and in the office—with a stronger, more effective month-end close in place. Close Your Books With Confidence Learn how Vena can help you improve your financial close process.

Change is inevitable. Change is powerful. Change is hard. All of these things can be true at the same time—and often are. That’s true in life and it’s just as true when it comes to changes to the solutions you use to power your ongoing financial processes—including your financial close.  Your month-end close process is an integral part of your finance team’s ongoing workload, after all. And as such, your team is probably used to approaching it in a certain way. So while introducing new technology may improve things in the long run, don’t be surprised if the shift comes with resistance from your team—at least initially. Without team involvement, though, any changes you make will go nowhere—which makes their buy-in critical to any new financial close technology investment.  Introducing Change Your team is busy already. It’s no wonder, then, that some might see learning how to use new financial close software as just another item on their to-do list. “It’s tough to absorb the change when you’re running a million miles an hour and doing your day-to-day job of closing the books,” John Power, COO of Fluence Technologies, explained in Vena’s recent Financial Close Livestream, now available on demand to members of Plan To Grow. “If you’re doing a project like this, it’s probably taking a lot longer than you’d like [to complete your month-end close] and you’re working lots of hours. Now you’ve got this project layered on top.” Power was one of several finance experts who participated in The Modern Financial Close Panel, led by Vena Chief Solutions Officer Rishi Grover. During the event (now available on demand), panelists explored how to introduce new financial close software in a way that gets your whole team on board.  Choosing the right financial close software is a good place to start, Power suggested. An easy-to-use solution that doesn’t add too much pressure to the team will be more likely to be accepted than one that comes with a steep learning curve. “One of the things that’s important is having a solution and an approach that doesn’t tax the organization too heavily and presents a solution that’s easily adopted and used and leveraged by the finance organization without them having to learn new technologies and how to program and things like that,” he said. But of course, we all know that effectively introducing new technology into the workplace, especially one as integral as your financial close software, can be tricky no matter what. Which is where your change management process comes in. Three change management best practices can help. Become a Plan To Grow Member Learn more about how technology is making the financial close process faster and smarter. Watch our Financial Close Livestream on demand at Plan To Grow. 3 Best Practices To Get Team Buy-in So how do you go about adding new technology that will keep your team invested and adopting new software seamlessly? These three change management best practices can help you get the team buy-in you’re looking for: 1.  Ask Your Team for Their Opinions  If you’re bringing in new technology to power your financial close process, asking your month-end close team their opinions is a good place to start. Getting involvement right from the beginning will help you get them invested early—but more than that, it will help you identify any pushback that exists from the onset.  Is your team simply so stressed with their current workload that the idea of taking the time to learn how to use new software is anxiety inducing? Are they happy with the technology you have and don’t want to change? Or is it the specific solution you’re considering that they have an issue with? Knowing the answers to questions like these can help you address their concerns from the start. “Most and foremost would be the end user buy-in,” Modern Financial Close panelist Martin Nöel, SVP and CFO of Premier Tech, explained. “Involve them very early in the process, identify their pains so they can speak for themselves on the gains they would see. If they [see] gains in their activities, they will jump into it and support the senior management's undertakings of implementing such a tool.”   2. Plan Out Your Approach Dumping a new technology onto your team’s laps without any kind of change management plan in place isn’t usually the best way to introduce something that’s bound to affect their entire workflow—even if that change is positive in the end. And especially if your team is already stressed out with their monthly financial close workload.  Creating a plan for your approach, on the other hand—one that’s empathetic to everything your employees currently have on their plate and doesn’t over-tax them—can help ease the way. That plan may include training and the release of learning materials, as well as time for feedback from new users.  Panelist Christine Harms, Controller for the Arizona Cardinals, used her team’s adoption of Vena as an example. “I, from the very beginning, included our team members on the finance team throughout the entire process: reviewing Vena, going through Vena, making the determination of what we wanted to see going forward,” she said. “And at that point, once we chose Vena, we decided that we would have a core team that included all of our senior accountants, staff accountants, the ones that were going to use Vena for the most part to finish the close each month, in building and developing the workbooks that were going to be used.”  3. Get CFO and Senior Leadership Involvement Big changes benefit from strong leadership involvement—and since any changes to your financial close process are going to be disruptive by nature, it’s a good time to bring out the big guns. “Buy-in from the top is extremely important,” said panelist Brian Carlson, VP, Financial Planning for Otter Tail Corporation. “To have their support and to be involved in the process and to be that cheerleader on the sidelines.”  Getting your CFO and/or other senior leadership to champion your cause early on can help build momentum for the new technology you’re trying to put in place. And communicating that commitment and demonstrating leadership’s involvement to the whole team will get others excited about it too, Power added. “Making that visible so that people can see it and understand and buy in [is one of the most important things],” he said during the panel. “I think that creates the push that’s required to make these types of things successful.”  What Comes Next By employing change management best practices like these to get your team on board and invested, you put yourself in a better position to successfully implement the technology you need to better fuel your financial close—and get the right people actually using it.  But, Carlson warned, as with any change management process, don’t be surprised if it’s not all smooth sailing—even with a well-thought-out plan in place. “A lot of times things have to get uglier before they get better,” Carlson said in the Modern Financial Close Panel. “It’s a challenge and just keeping that communication open through the whole process is so very important.” One last piece of advice: Don’t be afraid of change yourself, even if your team is. They’ll need someone to champion it from start to finish, celebrating the benefits of the new technology and what it can mean going forward. Just like the panelists in our Modern Financial Close Panel, you can be that person—leading your organization into a more efficient, technology-driven month-end close. Accelerate Your Financial Close Learn how Vena's financial close management software can help power your month-end close.  

Does your team spend too much time searching for lost invoices, requesting missing receipts, verifying transactions, investigating duplicate entries? Do they manually enter general ledger data from disjointed data sources provided by other teams? Do those other teams have their own way of doing things? If you've answered "yes" to all these questions and you're seeing how this tedious, inefficient work is impacting your team’s morale every month and you’re becoming concerned that they’re sacrificing accuracy for speed, it's time to take a look at your financial close process. In this blog, we’ll cover: Five signs your financial close process is too slow The problems with a long financial close process How automation can accelerate your month-end close to solve these problems Five Signs Your Financial Close Process Is Too Slow How does your financial close process fare against your competitors? In a 2018 survey conducted by the American Productivity & Quality Center, among the responding 2,300 organizations, the median month-end close time was 6.4 days. According to the survey, if your company’s close time exceeds one business week, you’re not among the fastest quarter of organizations. And if it’s two or more, then you’re among the slowest. Read on to discover five signs your financial close process is too slow. 1. Inaccurate Cash Flow Forecasts You’re not forecasting accurately because by the time last month’s numbers close, they’re already outdated. This snowballs into future forecasts and you can’t allocate resources quickly enough to where they would optimally support your company’s goals. Since your cash inflow forecasts are inaccurate, you’re not planning short-term operations effectively. And because your revenue forecasts are inaccurate, you also can’t forecast tax payments for tax season with much accuracy either. 2. CEO Doesn’t Receive Strategic Support From Finance You’re not providing your CEO with the accurate data that they need to make decisions because last month’s books aren’t closed yet. Since you can’t promptly analyze historical trends, variances or performance, you can’t support your CEO strategically to ensure that their decisions are well-informed, data-driven and fast. 3. Financial Close Checklist Interruptions Your team is consistently forced to restart your financial close checklist because data entry errors are interrupting your sequential process. They’re hunting down lost papers and constantly repeating processes. Due to the pressure to close faster, you notice some of your auditors and accountants are hurrying or skipping steps altogether—and that’s risking the accuracy and integrity of your numbers. Watch the video below to hear how Michelle Canada, Director of Financial Reporting at Tanger Outlets, helped turn their financial close checklist into an automated Excel spreadsheet.    To watch the full video of Vena’s Livestream on Finance Close Management, become a Plan To Grow member. 4. Lost Support From Investors and Lenders You’re losing confidence from external stakeholders in your business because you’re not demonstrating your progress toward financial milestones fast enough. Since you can’t demonstrate improvement of your company’s financial performance, your investors and lenders are losing interest in growing their investments in your organization. 5. Late Fraud Detection Your team is identifying fraud—and other inconsistencies and discrepancies—but only after they’ve been committed. Because of the delay, that impact and cost has grown far more than if they were detected much earlier.   Watch the video below to hear how Christine Harms, Controller of the Arizona Cardinals, turned 10 days of work into five seconds.   The Problems With a Long Financial Close Process When your team manually repeats processes, they’re losing time from work that could add value to your organization. At Vena’s Livestream on Finance Close Management, when asked for their top priority in investing in technology to transform their financial close process, the audience’s top answers were “more time for review and analysis” (41%) and “a faster close for forecasting agility” (37%). When organizations close faster, they can plan and make strategic decisions faster. So on Day 6, while your team is still reconciling accounts, your competitors are better positioning themselves in achieving their business goals—by analyzing numbers that aren’t outdated, evaluating progress toward their financial goals and ensuring resources are allocated effectively and quickly. While you’re still closing on Day 10, your competitors are well into planning their future. How Automation Can Accelerate Your Month-End Close Process Vena’s Financial Close solution provides a real-time snapshot of your company’s financial health. By automating data transfer from your ERP to your general ledger, implementing workflow notifications and adding audit trails, your company can close your books on time, every time and support your CEO with accurate data—faster. Accelerate Your Financial Close Automate your data transfer, implement workflow notifications and add audit trails to your financial close.