By Paula Fredericksen, Founder, Veras Partners
Anyone working in Finance and Accounting knows that the first quarter of every new fiscal year is painfully busy. For those of you operating on a traditional year end calendar, you are likely experiencing this first hand right now. The routine is similar regardless of your company or industry. First, you push through month end. Then you tackle year end and, of course, the final step is the Audit.
Overall, you’ll spend hours and hours of long days, working through lunches just to survive and get everything done on deadline. Unfortunately, during this process, very little time or energy is directed towards making the process easier or better for the next month end, year-end or audit. And that’s a costly mistake for a number for reasons.
Our recommendation to help you avoid that misstep is to make your routine different this year. According to a CFO article, only 25 percent of the companies responding to APQC’s General Accounting Open Standards Benchmarking survey were considered to be top performers and able to finish their month end close in under five days. As you work through your month end close, make a list of activities and reports completed outside of your ERP system. Any time an inquiries or special report is required, make a note. Why? Because each time this happens, your team is losing valuable time with each request. While it may not seem like a big deal to each individual, when you add up all the time and effort, the hours are significant.
You may also think moving data to Excel is the best way to do your analysis, but that’s risky because the numbers are no longer tied to the source. An inadvertent keying error can lead you down a long rabbit hole, wasting even more time and effort. If you aren’t using the source system, challenge your team to figure out how to automate it, within the system.
Once you have pulled together a list, use it to make your next month end a pain-free experience. Here’s how:
- Create and/or modify the reports to meet your needs.
- Identify new inquiries that need to be created and areas where you can do weekly analysis instead of waiting a whole month.
- Don’t have time to create or modify reports? Outsource those functions to an expert. The money spent on a consultant who is focused on creating your list of reports is a wise investment, and will save your team from overtime and burnout.
- Ask an expert about the best way to get the information out of the system and receive feedback on what other companies are doing. Making small improvements now add up to time savings on each month end close, not to mention a happier team. A system expert can also create the reports you need in a fraction of the time it will take the average user.
This same process should be used for year end close and audits. Sure, they only happen once a year, but having to create new reports and inquiries annually is redundant and a waste of your time and the auditors. Be sure to create a special folder for year end and audit reports and files, but create them in your ERP reporting system so that they can be used again the following year. Trust me, your Auditors will thank you for the consistency.
Using an expert to create the reports as you need them is worth the expense. Your team has other work to do, like their daily jobs and month end. The time it will save on the audit and over the next fiscal year will give you a great return on investment.