One of the most important parts of business accounting is your month-end close. However, this can also tend to be the most complex. With so much to incorporate into your process, it’s important you complete it with the most accuracy and efficiency. In light of this, this article will take you through what your accounting month-end close process can look like. It also covers how accounting automation software can be the key to optimizing month-end close process.
Your month-end close is essentially the point at which you wrap up your entire financial activity for the month. As a business accounting team, you need to make sure there’s complete visibility over corporate spending for the month just gone – what was spent, how much was spent, what was purchased, etc.
Below, you’ll find some of the key steps you need to take when completing your month-end close:
To begin your month end-close, one of the most essential steps is to gather all your financial data. This includes every transaction that took place across your business, throughout the entire month. This can involve things such as payments for services, purchasing products, employee expenses, client transactions, and much more. The data is usually collected in the form of bank statements, credit card receipts, expense reports, and any other vital documents.
Once you have all your financial data, you need to reconcile your accounts. This involves you matching up the transaction activity of your business, with the documentation you’ve received. For example, you can look at all your credit card receipts and reports, and review the transactions that took place in the company bank account, to ensure all numbers, dates, and all other important records are aligned. This way, if you should find any irregularities or discrepancies, you can make the necessary adjustments and communication to resolve them.
With all your data collected and aligned accurately, you can start devising your month’s financial statements. These are specific documents that outline various aspects of your corporate spending, over a certain period. They give a full overview of how your business conducted its spending, including what was spent in each area of the business, what your biggest expenses were, and many other core insights.
After your financial statements are in place, conduct one last final review of everything. This means ensuring all the data is one hundred percent accurate, and every discrepancy and issue has been resolved. Afterward, your statements will be ready to share with the wider company, as well as be analyzed and evaluated to help plan strategies for the future of your corporate spending.
By incorporating expert accounting automation software, you can significantly improve the efficiency of your month-end close process in many ways, such as:
With the right software, you can greatly speed up the process of collecting financial data. You’re able to automatically upload receipts after each transaction, such as those done with a credit card, for example.
This way, you won’t have to spend needless hours trying to manually enter receipts and payment reports, which not only saves you time but also avoids the possibility of any human error on the data entered.
This means all your data will be ready and waiting for you to complete the month-end close process.
Reconciliation can be long-winded, involving thorough searching for any irregularities, and having to go back and forth between all your accounts and documents. With your software, however, you can reconcile your payments almost instantly, allowing it to intelligently analyze all your documents and match them against your accounts. As well as this, you can even conduct your reconciliation before the accounting month-end. Thus, saving even more time when the month-end close process is due.
With meaningful spending insights, you can gain accurate information on how effectively your business is spending money, and all the ways to improve it. For example, you can receive data on any alternative transactions to the ones you’re currently making. These are more cost-efficient for your business. This will speed up your evaluation stage after you complete the statements. After all, you’ll already have many beneficial suggestions for improving your spending for the future.