A fast year-end close is a good indication of your organization’s overall financial health and a sign that your processes and systems are accurate and efficient. An effective year-end closing process also saves time, allowing your finance team to focus on value-added activities, which can positively impact your company year-round. If you’re hoping to speed up your year-end close, consider these four steps:
- Engage Audit Committees Early
Engaging auditors, both internal and external, early in the year-end close process will help avoid pitfalls and give your Office of Finance insight into the improvements that can be made to your systems. Auditors can also provide regular feedback throughout the implementation of a financial management system and can challenge staff on delays.
- Improve Financial Control
Implementing a financial management system will provide a means of assessing how your company is able to react to and mitigate risks. When auditors deem that your systems are operating properly, it will only be necessary to test small sample sets of data instead of large quantities of transactions.
- Develop the Management Reporting Function
Establishing a system for producing regular management reports can make the year-end reporting process easier by allowing departments to track their resources and expenses throughout the year. Up-to-date management reports also allow departments to re-allocate and re-prioritize their resources to ensure corporate goals are met. This will not only benefit a faster close but more effective management.
- Ensure Effective Project Management
Project planning should be part of the system used to manage and deliver year-end reports.
Above all, it is recommended that you have a sound financial management system in place. Corporate Performance Management (CPM) software has been designed to allow for better visibility of divisional performance and make it easier to share information across the business. CPM software can also significantly reduce the time it takes to close the books and report externally, reducing reliance on local systems.
Once you have achieved a faster year-end close, you can apply these principles to your year-end reporting, month-end, annual budgeting, tax and audit preparation, product profitability analysis and quarter or mid-year forecasting.
To learn more about the benefits of a faster year-end close, read our whitepaper Achieve A Faster Year-End Close Now.