Using Financial Automation As Your Month-End Closing Solution

Did you know that before we established a standard numbering system, accounting was done by keeping track of animals and grain with clay tokens? The world’s first writing originates from this ancient accounting system, in which these farming communities used small geometrically shaped clay tokens to keep count of the livestock and grain produced, with the shapes of these clay tokens defining the merchandise they were tracking. Cones represented barley, and a disc represented sheep just to name a few examples. Thankfully, the accounting industry has evolved leaps and bounds since then, with modern accounting systems even shifting to cloud-based accounting software for recording our financial transactions. Many businesses still feel comfortable sticking to the current status quo of manual accounting, but these processes pose serious challenges to companies looking to develop and scale their businesses. Let’s take a look at how we can utilize financial automation to optimize our month-end close.

Month-End Close Solution

Before we can fully understand the importance of financial automation in the month-end close process, we first need to truly understand what this process entails. The month-end close process typically occurs just at or at the beginning of the following month and should last a few days, although for some companies it takes weeks.

Before the accountants can even report these transactions, they still need to capture, review, and adjust the data, and only until the closing activities are completed can the financial statements be presented to the stakeholders. The month-end close however, tends to focus on activities such as substantiating accounts on the balance sheet, recording recurring journal entries, analyzing variances, monitoring important tasks, and preparing the financials. These activities are often done on spreadsheets, manually reported by the accounting teams, and stored on either email, shared storage drives or even binders.

Using manual methods leads to reporting inaccurate data, inconsistent processes, and disjointed operations across the entire organization. In this highly digitized environment, it is no longer sustainable or necessary to stick to these archaic methods. With affordable automation options in the market, this is something that should be a no-brainer.

4 Benefits of Automating the month-end close process

1. Standardizes the process

Having an automated system allows your teams to have access to accurate and standardized data, with digital documentation of the entire audit trail for your organization to check. Less time is spent on organizing and wading through documents as automation allows for standardization which puts everyone on the same page.

1. Saves Time and Team Headaches

Accounting is often a tedious and time-consuming task, and processes such as transaction matching and account reconciliation take up the bulk of your team’s precious time. Updating closing checklists and reconciliations manually adds a lot of burden to the accounting team.

Not only does this result in a lengthier month end close, but it also causes your accounting teams to be overworked and may result in burnout, which decreases their motivation and productivity as their overall quality of life and work-life balance is compromised. Considering  automation for the month-end close  can create an organized and optimized workflow that saves time and improves the productivity and transparency of your organization.

1. Manage Risk

Financial automation helps alleviate risk by sending out risk alerts for accounts that have large variances, write offs and significantly aged items that have not been resolved in a long time. There are also quality tools that automatically assist preparers and reviewers to do better work by letting them know things that might be missing in their reconciliation. This prevents rework and saves time.

1. Stay Competitive

Utilizing a cloud system creates a secure and efficient network for your accounting processes to utilize. Not only are cloud systems more secure than most on-premises data systems, but financial automation can also be slowly scaled and adjusted along with your organization.

Automation allows your organization to easily scale and keep up with the growth. Companies adopting month-end close automation also enjoy the added benefits of real-time insights, monitoring and tracking. It also replaces the redundant administrative functions that can be replicated by a machine so that human hours are freed up.

Financial Automation at SkyStem

If you are looking for month-end close  automation to be introduced into your organization, look no further! SkyStem was established in 2009 with the goal of bringing soul to software by providing intelligent and intuitive solutions to fully optimize the business operations of your organization. Their flagship solution, ART, can eliminate up to 90% of manual month-end close work by leveraging automation. Contact us now to find out how we can help your business save money and close faster!