Simplifying Month-End Closure - Best Practices for Accountants and Bookkeepers

As accountants and bookkeepers transition into strategic business advisors, one constant remains - the need to be prepared for month-end closure. Month-end remains to be a very much dreaded two words considering the mammoth amount of data and documents the accounting community has to endure. Preparing for this by no means is an easy feat due to the range of other activities accountants and bookkeepers are required to handle. In this blog, we break down the best practices to simplify and speed up month-end closures so you can focus on adding value where it really counts.

Why is month-end closure important? 

Month-end closing is a crucial part of running an accounting or bookkeeping firm, whether small or big. When done right and consistently, this can take off a lot of pressure going into the year-end and help you make time to offer more value-added services to your clients. 

Listed below are some of the benefits that you can reap out of a regular month-end closing: 

• Identify potential frauds/discrepancies in your financial data 

• Simplified tax filing by saving valuable time 

• Reduces errors in year-end reporting 

• Provides insights that drive better business decisions 

• Straightforward audits and enhanced financial accuracy 

Best practices to follow 

In this section, we'll explore six strategies to make your month-end closure more efficient and provide valuable insights into your business's financial health. 

1. Always Have a Checklist: Preparing a standard month-end checklist with all the activities that need to be ticked off gives structure and clarity to your process. Be it reconciling the bank accounts, closing the pending dues, or preparing tailored checklists for different clients or industries, ensures nothing slips through the cracks, especially when you're juggling between multiple books. 

2. Make Full Use of Automation: Finding ways to save time wherever possible can make a real difference when it comes to closing books. This is where technology tools can come in handy that can save you hours and free you up for analysis and advisory work. From automating recurring invoices and reminders, bank feeds, and reconciliation, to scheduled financial reports; a cloud accounting software can do the heavy lifting, reducing human errors and ensuring consistency across your records. 

3. Spread Out the Work: As an accountant, standardizing the key tasks across your team or clients is crucial to maintain a hassle-free closing process. Encourage your teams to follow or complete certain activities on a regular basis rather than piling them up towards the month-end. This can be weekly transaction reviews, regular categorization of income and expenses, periodic checks of payables and receivables, and much more that can help in ensuring your month-end does not turn into a marathon.

4. Proactive Communication: Month-end closing isn't just dependent on you; it brings multiple stakeholders from diverse teams both within your organization and your clients. Setting a process and internal timelines ensures everyone knows their responsibilities, creating clarity and minimizing bottlenecks. As an accounting or bookkeeping partner, keep it a practice of setting timelines, reminding clients about pending receipts, and coordinating with other departments if needed. This ensures everyone is on the same page, leading to faster and smoother month-end closure.

5. Leverage Analytics for Financial Insights: Alongside reconciling accounts, updating accounts payables/receivables and other month-end activities, as a part of your month-end deeds, make it a point of creating compelling dashboards that gives a clear view of your client's financial health and visualize KPIs (cash flow, expenses, AR aging, etc..). This makes it easier to track progress and spot trends, and helps you move beyond just closing the books to delivering real-time, helping clients with data driven decision-making each month. 

6. Regular Back-Ups: This might be the last in this list but is something that cannot be compromised and takes precedence when compared to other practices. Ensure you always have a backup of your data, and for this, having a cloud accounting software with automated backup capabilities ensures that business financial data is securely stored, and easily recoverable when needed. In fact, you might want to keep a backup for the data before you start the month-end closing process just in case something goes south. Such software should also have options to password protect the file and enable role-based permissions to make sure only the right people have access to the data. 

Final thoughts: 

Month-end closing can be a tiring and laborious process. But that can be turned around, with the right workflows, modern technology, and team coordination making it a smooth and even insightful process. With the million and one things you as accounting professionals are juggling between, the last thing you want is a lack of process that slows you down or adds unnecessary complexity. 

Streamlining the closing process not only improves efficiency and saves time but but also positions you to deliver significantly greater strategic value to your clients and your organization. 

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