Authorities demands all of your month-end close process generated documentation to be available for audit at the drop of a hat, as one of many measures to prevent fraud. How can we best organise it all for quick reference and safekeeping?

Several financial scandals over the last 10 to 15 years have led to stricter regulations imposed on finance departments, requiring booksmonth-end close, month-end close process to be visible and transparent at all times. Authorities want to stop another infamous Enron scandal in its tracks, which means that financial reports and all accompanying documents need to be easily searchable at the drop of a hat.

However, all the documentation that we generate during the month-end close becomes incredibly difficult to organise effectively. Binders have been the favourite choice of many a finance department, in fact, 64% of finance staff admit they’re still using binders as part of their document archiving process. The problem with binders – and I’m sure many other finance professionals will agree – is that they are cumbersome to search through, making referencing inefficient and auditing a real nightmare.

So then, what’s the solution? Here are some better alternatives to help better organise your month-end close documentation.

Journal entries

The bulk of your monthly financial close documents will be in the form of journal entries. Each journal entry needs to be filed along with supporting documentation, which quickly makes your physical binder rather bulky.

  • How we usually solve it: The best way to file these financial journal entries is in numerical order with all the supporting documentation – invoices, copies of reports and other documents – attached. This way you will be able to quickly look up and reference any journal entry and related documents for the purpose of financial audits, or indeed upon request.

But is that all we can do? 

Account reconciliations

The other major space drain for your binders will be your account reconciliations. Depending on the size of your company and the number of transactions you process each month, you may have pages and pages of account reconciliation printouts. What’s more, balances that do not match need the appropriate documentation to substantiate the amounts.

  • How we usually solve it :This documentation should be attached to the relevant reconciliation sheet and all sheets stored in account number order to make them easy to reference.

But is that all we can do?

Documents that relate to multiple periods

One thing that can throw a spanner in the works is when a document used to support the journal entry or used to justify an amount in your reconciliations is needed in multiple periods. Say, for example, that you have a loan agreement that needs to go along with both your journal entry for that account and the balance sheet reconciliations in order to substantiate the monthly totals. The loan agreement is likely to be quite a lengthy document and one that will need referring to in recurring months. Should financial staff have to keep copying it month after month, leave it attached to the starting month, or keep moving it to the most recent month?

  • How we usually solve it :If the document is quite long, in the case of a loan agreement example, then you should continuously move it to the most recent month, including a note on the previous month that it was moved, e.g. ‘Moved to Nov 2013’. If the document is reasonably short then you can simply copy it and attach it along with the most recent month in which it was referenced. 

But even if we improve things, documents are still far from being available and searchable at the drop of that hat. Besides this, all the printouts, all the storing space, all the management … just eats up scarce resources with pretty tedius and boring tasks, too.

Isn’t there a better solution?

A smarter month-end close process

Complete balance sheet reconciliation and monthly financial close softwareas BALANCER from Adra Match, digitises all of your monthly accounting documents and stores them all in a digital archive. It is then very easy to attach the relevant digital documents to each journal entry and financial account reconciliation as needed, and by doing it digitally you save the effort, paper and binder space required to keep printing them out.

What’s more, digital archives are quick and easy to search through should you need the information for later reconciliations or for a financial audit, and it safely displays whom did what. See how BALANCER works in our short introduction video.

Other highlights of BALANCER include:

  • Ability to document specific accounting procedures and company policies for quick reference
  • Documentation of your monthly account reconciliations
  • Clear visibility over the monthly financial clos process, from preparation to approval through to review
  • Templates designed to prompt you to gathering the correct information
  • List / Calculated Balance (from Accounts) Subledger Match, Amortisable Prepaid, Checking Account etc.

Discover the full range of benefits of our balance sheet reconciliation software, BALANCER, with this short introduction video and achieve a smarter month-end close process. Now you may have it all available at the drop of a hat. 

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