Ever wondered why controllers are so keen on attaining a faster close process? This is because the best measure of controller efficiency is the accuracy and promptness of the financial close process.
In addition, having a fast and efficient close process allows the finance team to not only present the figures through reports rather they become well positioned to execute high yielding activities that can help propel the business toward success.
If achieving a faster close process was easy, all organizations would have done it. As you may very well know, this is easier said than done. Many organizations struggle with achieving a faster close without needing to increase staffing levels because for most companies their end to end financial process is marred with inaccuracies needing validation and tasks requiring manual input.
The financial close process includes income statement, balance sheet, statement of cash flow, operational metrics, analyses of certain reports, forecasting, and scenario simulations among other things.
Below are 4 best practices that will help you achieve a faster close process.
- Create a Scorecard for your team
It is important to create a simple scorecard for your team of the tasks they need to accomplish so that progress or bottlenecks can be easily identified. Examples of these tasks are: tracking of the number of manual journal entries, expense reports, bills, accruals and invoices.
- Ready a One-pager Report
Year after year, the entire finance department is under extreme pressure because stakeholders like lenders, investors, executives want access to the results immediately. Preparing a simple one-pager report can buy the finance department some time. This one-pager report should cover 10-12 key metrics for the business and balances.
- Automate, automate, automate
The reason why external and internal auditors hate manual entries is because it opens the gates for deviations and errors. The truth is you can never fully eliminate the manual nature of certain tasks but you can reduce it by standardizing, formalizing, and automating the entire process. When you adopt a financial reporting and budgeting software like Performance Canvas Financials, you can enforce your accounting policies across the organization and any process deviations that exist are deviations that are thought through and consciously permitted.
- Prepare the forecast ahead
Knowing your forecast ahead helps your controllers spot errors and other potential issues. This is because positive or negative outcome will make these issues stand out. With this, controllers can then investigate or dig deeper and it will give them time to provide commentaries before the actual closing.
After all, the fewer the errors, the faster the close and the more reliable the results are to the board.
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