5 ideas to optimize your month-end closing process
Month-end closing is a comprehensive and time-consuming process with a myriad of tasks to keep track of; reconciling the balance sheet and providing documentation that satisfy both management, stakeholders in operations, internal and external auditors etc. Month-end can be stressful, especially because many people are often involved in the process and bottlenecks appear. We have listed five ideas to optimize the month-end closing process and make it less stressful.
1. Distribute tasks across the month when possible
Does everything really need to be done on the first work day? Certain management judgement activities within areas like warranty reserves, bad debt provision, and inventory write-down may just as well be calculated on the 20th day of the month as the first day of the month. The outcome is uncertain either way as it is an estimate that is based on judgmental input.
2. Automate when possible
Automation of recurring tasks like depreciation, rent, leases, etc., is a quick-fix that will instantly save you time. These types of recurring tasks can easily be automated so that you do not have to spend time doing them every month.
Are all tasks equally important? Did you remember to apply materiality thresholds in your closing process or are you waiting for even the smallest amounts to be corrected? Stop delaying your processes because of insignificant ‘items’.
4. Keep a dynamic approach to your control baseline
Smaller entities often require fewer controls so keep a dynamic approach to your internal controls. Make sure to revisit your control baseline occasionally to see if it reflects your company’s current needs or if there are too many controls that kill good control initiatives.
5. Separate financial controlling from business controlling
Make sure that you are not waiting for analyses of figures unless they are necessary for the closing of the financial figures. Business controlling is extremely value adding, but it should not be a hindrance – it should neither stop nor delay the financial closing process.
Impero is a cloud-based compliance solution that helps keep track of controls, activities and related tasks. Gathering all work in Impero makes accessing, sharing and creating documentation easy and efficient. Being in the cloud, Impero can be accessed from all kinds of devices: smartphones, tablets and computers, and, thanks to the intuitiveness of the platform, implementation takes no time.