S P O N S O R E D
According to KPMG, 69% of Chief Accounting Officers say transformational work is necessary because ongoing business change requires active accounting input. While accounting leaders have clearly embraced the idea of optimizing the month-end close process, what’s not as clear is where they should begin.
What Is the Month-End Close Process?
Before we explore leading practices for optimization, let’s start by defining the month-end close process. Terms and phrases like “record-to-report,” “accounting-to-reporting,” and many others are used interchangeably to reference the series of activities accounting teams must monitor, perform, and review, on a recurring basis, to produce timely, accurate, and complete financial statements and related reporting.
The figure below provides a visual overview of the process and key activities.
What Are Month-End Procedures?
While traditional accounting leaves a lot of the heavy lifting for a few peak days, the month-end close process is ongoing throughout the month as transactions are recorded in various systems.
Before reporting, Accounting must capture, review, and make adjustments to data from these disparate sources, which often include a primary ERP system, other ERPs, subledgers, banks, point-of-sale systems, and many others. When results are solidified and reviewed, Accounting then reports results to stakeholders including internal management, external shareholders, regulatory bodies, and others.
But, when accountants think about the month-end close, they’re likely referring to the activities in the middle of the figure above, like substantiating balance sheet accounts, reconciling transactions, recording recurring journal entries, analyzing variances, monitoring critical tasks and controls, and supporting audits are the ones that require the most effort. These activities are traditionally performed manually in spreadsheets and stored in difficult-to-manage and control emails or on shared drives.
Now that we’ve defined the month-end close process and the procedures that comprise it, let’s consider the challenges the month-end close typically presents for accounting organizations—the likely reason nearly 70% of CAOs recognize a need to change.
The month-end close process relies on myriad of people, technology, processes, and many other inputs. As a result, accounting organizations are challenged by inconsistent data and processes, and a lack of standardization across the enterprise—all while depending on spreadsheets, emails, phone calls, and historically in-person meetings to bring it all together.
As business leaders look for Accounting to provide more real-time insights, and while regulatory environments are increasingly complex, it becomes even more difficult for Accounting to do it all on time without compromising compliance or controls. Traditional manual accounting processes are simply not sustainable.
How Automation Technology Improves the Closing Process
To optimize the month-end close process, companies should embrace technology and innovation that enables transformation. Integrated solutions that address more than one aspect of the close process, and in particular, cloud solutions, are helping companies make the move to modern accounting—bit by bit. Let’s take a closer look at how automation technology improves the financial close process.
While there’s no one size fits all approach, many successful accounting organizations begin their optimization journey with close management by unifying data and processes and driving better accountability through visibility. Technology can be used to capture all tasks and embed workflow and segregation of duties. Leading solutions also help centralize supporting documents and provide dashboards for reporting on status and KPI’s.
How BlackLine + QuickBooks Streamlines the Close
The BlackLine Accounting Cloud is a leading accounting software platform and has helped thousands of accounting teams make the move to modern accounting. BlackLine solutions unify systems, data, and processes to unlock visibility, automate repetitive work, and deliver continuous real-time information and analysis.
Most importantly, BlackLine enables modern accounting to be achievable.
Let’s examine the case of Aemetis. They had a growing company in terms of revenue and a small, over-worked global accounting team. They knew their process needed updating and decided to integrate BlackLine with QuickBooks to eliminate a paper-based close. Happily, they experienced the following benefits:
- Saving 3 to 4 workdays each month
- Streamlining third-party auditing
- Increasing employee accountability
- Enabling real-time analysis.
Get your copy of the Aemetis case study for more information.
It’s Time to Make the Move to Modern Accounting
More than 3,400 companies use BlackLine, which is ERP agnostic and the trusted leader in financial close management solutions. So, no matter what finance system you or your client works with, the BlackLine ROI has been proven over and over again. Ideal organizations have at least five accountants and $25 million or more in annual revenue.
Read the modern accounting playbook to get started, and contact sales@blackline.com to find out more.