Accounting and finance departments have a vital responsibility to produce accurate and complete financial statements. The business depends on these numbers for effective decision-making, forecasting, and strategic planning.
Trust begins with the numbers, but if those numbers are produced by manual processes — well, it’s no wonder accountants are feeling the pressure.
The close process is weighed down by manual, repetitive tasks (think data entry and complex spreadsheet formulas) that absorb accountants’ valuable time while increasing the likelihood of errors. Weaknesses and inefficiencies in the reconciliation process often lead to misstatements and control deficiencies, which can result in penalties and fines, devaluation of stock price, damaged public image, litigation, and even bankruptcy.
Accuracy and integrity are the ultimate goals, but the intensely manual nature of this process puts that goal in jeopardy.
Here are three areas that are increasing risk and killing your confidence during the financial close.
Error-Prone Account Recs
An account reconciliation is only good if it agrees with the general ledger. To check this, you have to create a spreadsheet – which is error-prone.
And then what happens when someone comes in with a late entry, or something is changed in the general ledger but not updated in your spreadsheet? There is nothing in place to confirm that you caught everything in your reconciliations. This leads to that looming feeling of: should I triple check one more time? Did I get everything? Are the numbers accurate?
We’re all familiar with that feeling of overwhelm that comes from opening a file with 30 tabs: “Every reserve model since 2013 can be in here. Where do I begin?? How do I know what I need to be looking at here, and how on earth am I supposed to find it?”
A lot of accounting processes start with a roll forward, and when you’re locked into this habit, it can result in unnecessarily large and confusing files.
The reality is that your attention is only needed in a small portion of that spreadsheet, but when a document takes on a life of its own, it can quickly consume valuable time while wearing you out before you even begin.
If a formula in one of those 30 tabs is off by a line or a row, you now have an error that is difficult to correct. Calculations can be off for all pre-paid items. In massive spreadsheets, if a calculation is off by one row or column, everything else is now also off by one, and there is no way to check every formula in every cell.
Drag something incorrectly, copy and paste it in the wrong spot, add an extra row, hit backspace one too many times, and an entire workbook is compromised. This is why teams who are accounting manually live with the fear of not knowing what’s behind the numbers.
It’s Time to Close with Confidence
The most effective way to automate the error-prone, manual tasks that are known for exhausting resources is with a finance controls and automation platform.
Instead of working frantically at month-end to aggregate close data, you can automatically import data into a unified platform from almost any ERP. Instead of manually matching transactions over hours or even days, you can automate this process and complete the same task in mere minutes.
And instead of dealing with doubt every time you need to hand over those financial reports, you can deliver them with confidence, knowing they’re complete and accurate.
Finance automation reduces human error, increases standardization, improves visibility, ensures stronger controls, and streamlines internal and external audits. Companies can save a significant amount of time while ensuring a more accurate financial close, and also experience the benefits of powerful analysis and reporting.
The right platform equips organizations to start making truly real-time—not behind-the-times—business and strategy decisions. And this is how accounting and finance can finally earn a seat at the table.
Read this brief to learn more about how you can close with confidence and be done with doubt.
The post How to Restore Your Confidence — Especially During the Close appeared first on BlackLine Magazine.