ART gives your team the right tools to quickly and easily do what needs to be done – from preparing reconciliations to tracking progress and managing others.
Simplify Account Reconciliations
The balance sheet reconciliation is the workhorse of the month-end close. It is one of the most important activities but receives very little attention and recognition. A common misconception is that reconciling accounts is an easy and basic activity when they’re anything but.
And here is a little secret: Most organizations are committing one or more of the following account reconciliation faux pas each month:
- Replicating the general ledger transactional detail in Excel
- Reconciling to the wrong GL balance
- Insufficient supporting detail attached to the reconciliation
- Segregation of duties violation; the reconciler of the account is also allowed to post journal entries to the account.
- Untimely preparation
- Lack of thorough review
- Reconciling too many or too few accounts each month
- Allowing reconciling items to age over 90 days
- The presence of long-standing “mysterious” variances that can’t be explained
There’s no one to blame for this. When butted up against closing deadlines and limited resources, the amount of labor required to complete reconciliations via spreadsheets, checklists, and paper means that most accounting teams can only manage to maintain the process “as-is.” There certainly isn’t enough bandwidth to timely investigate issues and optimize the reconciliation process. Without proper tools, it’s insanely difficult for accounting managers to enforce quality without compromising efficiency once the organization grows beyond a certain point.
Account Reconciliation Automation
This is where ART can help. ART helps the accounting department eliminate up to 40% of the total reconciliation volume each month, automate cover sheets and other labor-intensive administration so that accountants can win back their time and their sanity.
Quality improvement is also important. ART offers a variety of standard forms to help you achieve reconciliation best practice. Or, if you prefer, feel free to link your existing spreadsheet reconciliations into ART and continue to complete reconciliations in Excel.
ART can do even more. Real-time monitoring, insight, and reporting give bosses like you tools that were never available before, allowing you to see more and do more, without burdening the staff with your pesky status requests. (Just kidding, your status requests are never pesky!)
Streamline the Close
The month-end close is where information from all the key processes collides. No wonder it often resembles an information traffic jam.
- There is a lot of interdepartmental information that’s needed to close the books. However, it may not be every department’s priority to help the accounting team meet their closing deadlines.
- Among the accounting team, it is often unclear as to which activities are completed, which are awaiting review, and which activities are not yet started.
- Deliverables relating to the close activity are housed all over the place. Journal entry information can be stored on a shared drive, while the pension analysis report is on the Treasurer’s desk, and the close checklist sits in a binder in the Financial Controller’s office.
Administrative work can be substantial: certifying, scanning and printing, filing, searching, updating checklists and collating binders.
This is where ART can help. ART’s Task Master helps build out and assign accountability to task owners so that there is never any confusion as to whether a task has been completed, a document submitted, or a journal entry reviewed.
- Deadlines for interdepartmental tasks can be scheduled in ART and then tracked for completion.
- Email alerts manage delinquent tasks so that you don’t have to.
- Electronic sign-off and real-time tracking of activities mean that we can all work from anywhere and stay on task.
- Whether you’re at your desk or traveling, as long as you have a secure internet connection, you’ll be able to access your closing checklists, status updates and any underlying documentation associated with your tasks.
What about certifications? It’s one of the most burdensome activities during the quarterly close. Automate the certification process with ART, where ART systematically generates key balance sheet information for each level of the organization for electronic sign-off. With ART, your organization can certify data such as account ownership, open items aging, exceptions, write-offs, and delinquencies all without having to pull together offline documents.
What’s more? At SkyStem, we understand that technology is not always welcome. The training required to learn and fully master large enterprise software can wear out your team. That is why ART is specifically designed for busy finance professionals who have little time, or desire, to learn new software.
Do your audits feel timeless, as in they never end?
Are auditors looking to you to provide even more information, more invoices, more explanations, and more documentation for each financial close?
Satisfying auditor requests is a big burden. When they roll into town, here is what they want to know when it comes to the close and reconciliation process:
- Is the close process accurately and completely executed?
- At the transactional level, are the checks and balances working as intended?
- Are entries recorded correctly in the general ledger?
- Are application and system controls functioning?
- Is the accounting team maintaining adequate segregation of duties?
- Are there sufficient monitoring activities happening at a higher level to anticipate and detect material anomalies?
- Do accounts have owners and if so, do they understand the nature of their accounts?
- Are key controls, such as balance sheet review and variance analyses being performed timely?
- Are there documented policies and procedures to guide staff through the process?
As a process owner, you need to show that you are in control of the financial close, and have the commanding knowledge of the activities and tasks being carried out by your team. This means proving timely completion of important work each month, having easy access to reconciliations and documents, and producing enough information and a solid paper trail for auditors to gain comfort, and in some cases, re-perform your work.
Administrative? Certainly. Important? You betcha.
This is where ART comes in. ART helps manage the slew of activities that must be completed and approved during the close, in a way that’s conducive to the auditing process. For example:
- The closing checklist — Completed tasks are electronically signed off, with underlying documents attached and easily retrieved.
- Key journal entries – The organization’s standard key journal entry list is automatically scheduled each month. Sign-offs are systematically tracked.
- Balance sheet reconciliations – Each account has a comprehensive audit trail for audit purposes.
- Certification – The auditor can review the certification language and review sign-off activity anytime. Because everything is done online, your auditors will have easy access, within the framework you established, into sign-offs, checklists, and archived documents.
Improve Internal Controls
The regulatory environment has grown increasingly tough in the last decade. As stewards of the financial statements, finance, and accounting professionals are expected to execute more internal controls than ever before.
And this is where the math doesn’t add up: There’s more compliance-related work to do, but the same number of people to do them. In an effort to maintain a good control environment, it’s easy to get buried in crossing T’s and dotting I’s all day long, and pass on the more strategic projects (and not to mention more fun projects) that may come along.
Invest in your people by placing a higher value on their time. A great way to start is to look for ways to automate. And here is where ART can help. ART replaces manual controls with automated internal controls. Whether your organization is publicly traded or privately held, compliance becomes easy when ART’s checks and balances enforce internal controls for you, for example:
- The automated workflow keeps your team on task and on schedule during the close
- Close and reconciliation checklist statuses are updated in real-time
- Executive dashboards and detailed reporting identify potential errors, delinquencies and other risk areas instantly
- System reconciliation kicks in upon meeting thresholds set by management
- ART’s standard forms capture policies and procedures and help guide the proper preparation of reconciliations
- Rules, alerts, and reminders ensure key activities are executed
- Electronic sign-off and audit trail gives no ambiguity as to when and who signed off
- Electronic review notes capture management comments and are timely emailed to recipients
- System rules ensure proper segregation of duties by preventing the same person from preparing and reviewing reconciliations
- Role-based access governs who can see what when it comes to the balance sheet.
In a perfect world, office paper would be used for two things only: fanciful doodling and hard-core origami. Unfortunately, we live in an imperfect world, where printouts, binders, and papers dominate our desks each month. The problem with physical documents is that they can get lost or misplaced. Beyond that, how much does it cost to own physical documents, in terms of printing, storage, hand-off and transportation costs? These expenses, no matter how big or small, add no value to your process.
In addition, activities conducted on paper run the risk of backdating and manipulation. Keeping them in an electronic format helps reduce the possibilities of such things happening. You want to have a lockdown on all the wonderful work that you do and make it extremely difficult to tamper with. You can use your memory for more important things than recollecting which email or binder carried the support that was emailed from your vendor. You need an online document repository for all of your work supporting account reconciliations and the financial close.
This is where ART can help. What happens when you adopt electronic document management in ART? First of all, you’ll become a hero to the trees. Secondly, you gain freedom – freedom from filing methodologies, from remembering which box has what, from stressing about whether someone is walking off with your document. Every document you’ll ever need from a close and reconciliation standpoint will be housed in ART’s online document repository and be electronically accessible by multiple parties anytime. There will no longer be version control issues, or the need to wait your turn for “The Binder.” Printing activities will be minimized, and no more signing endless lists of documents!
But why stop here? ART can smartly manage your e-documents so that certain types of information – like prepaid invoices – can carry forward to future close periods, without the need for someone to re-attach them.
Pushing paper is a thing of the past. It’s administrative, inefficient, and harmful to the environment.
The workplace is becoming more and more demanding of us, which is why we need to demand more from our tools. The more powerful our tools are, the less work we have to do. It’s hard to stay competitive as an organization when the accounting folks are still spending time on document administration. It’s like showing up to a fight with a butter knife when everyone else brought bazookas.
Real-time archiving means not having to do extra work. Document archiving is happening as the work is being completed, and documents then become immediately accessible to other stakeholders. It means that when the close is done, there are no additional steps to:
- Check to see if something is missing from the shared drive
- Delete previous versions of stuff
- Make sure everything got signed
- Manage access to directories
- Create binders
- Ship documents for storage
- Search for that invoice or that analysis or that report
Best in class companies are investing in technology to get rid of this kind of low-level work. The accounting team’s talents are too valuable and should be directed to activities that can strategically propel the company forward.
Once you automate your financial close, you too will say “very cool” once you see that ART has established the financial close workflow for you and then acts as a centralized document repository which can be accessed with just a few clicks.
Perform Flux Analysis
The balance sheet flux analysis is one of the best high level review tools availabe at the accountant’s disposal to assess the general accuracy of balance sheet accounts. In performing the flux analysis, account balances in the current period are compared against prior period(s) to assess whether significant changes have occurred. Acceptable fluctuations, in the form of amounts or percentages, are set by management. Any balance that exceeds threshold are routed for further investigation, review and approval.
When coupled with journal entry review and account reconciliations, the flux analysis provides the much-needed bird’s eye view on whether accounts are directionally correct. Sadly, many teams have to skip this exercise due to time constraints during the close each month, and this is where ART can help.
ART’s Flux Analysis module automatically compares current period balances against prior period(s), while factoring in management’s preset thresholds. Any account that exceeds the threshold is routed to applicable owners, so that they may investigate the nature of the fluctuation and document the explanation. In addition, ART provides:
- Real-time dashboard that tracks the status of each account that is fluxed.
- Real-time exception scorecard that tracks unexplained amounts.
- Electronic sign-off and up to two levels of approval.
- Email notifications on status change and due dates.
- Document attachment and central repository.
- Auditor view controls.
ART’s flux analysis can be set to run on a periodic basis (period by period, each quarter, as needed, etc) and alleviating the accounting team from having to manually drive the process each time.