As a finance professional, constantly playing catch-up with your financial account reconciliation process means you often end up going at a slow crawl! But in 3 simple steps you could get ahead of your accounts and make your monthly close process a breeze.
Think of all those tasks we could get done if we didn’t have to worry about the monthly close process. Yet every month tasks, like account reconciliation, slow us down to a crawl, setting our other projects back. But with some simple changes to our approach building up to account closing time, we can streamline the process and get ahead of our accounts – leaving us plenty of time to work on more strategic projects.
Step 1: Create a consistent methodology and terminology
When you carry out the same processes month-in and month-out, it can be very easy to overlook different interpretations of methodology or terminology. However, even tiny differences can have a huge impact to your results and lead to confusion when you try to improve processes.
Before you can build upon and refine your processes, it is essential to ensure your financial team have a common understanding of methodologies and terminology that your company uses as standard.
Consider putting together a written guide and take some time off to educate your staff– this will clear up misunderstanding and save time getting new staff onto the same page. Take a look at the tangible benefits of automated month-end account approval processes in action in our automated accounts transaction matching software.
Step 2: Reconcile each ledger individually
Given how long it takes to reconcile any ledger, it may seem a waste of time reconciling the balance sheet of each account individually. However, accepting ledger totals at face value can lead to mistakes that will compound month-on-month into huge problems later.
By reconciling each account balance sheet individually you can be 100% sure that all your figures are correct and will not need adjusting the following month. Because if you would find yourself needing to recheck the figures, individual sheet reconciliations make it easier by creating a more complete accounting trail.
Step 3: Invest in the right software
Accounting software is now a much more mature industry, with some really useful tools available on the market. ERP solutions have become even more powerful, the Cloud is providing even more software as a service (SaaS), and automation software is being adopted.
[Check out our infographic: What goes wrong in the manual account reconciliation in process]
With great technology becoming available to all, all companies (even small businesses) can encounter huge efficiencies to their accounting processes. The benefit of all these efficiencies is that financial directors and CFOs can get ahead of their accounts and start providing more strategic insight to the business.
If you’re looking for a financial quick win read our free guide: Controlling your transaction flow effortlessly or book a demo of our reconciliation automation software today.
Over to you
What would you be working on if you didn’t have to worry about the monthly close?