As the year starts to wind down, it’s a common time to reconsider the
financial processes your organization has in place—looking at what you
can streamline or change to make your business better. And in these
unpredictable times—where new workforce demands, such as dispersed
teams and decentralization, add their own obstacles—it’s more
necessary than ever. After all, the more resilient your processes are,
the better equipped your business will be to stay on top of new
demands—while remaining ready for other changes ahead.

This includes the processes you have in place to power your month-end
financial close.

In fact, by nature of its frequency, streamlining your close cycle can
have a major impact on your financial processes as a whole. The
tactics you draw on every month can mean the difference between a fast
and clean process and one that’s long and inefficient, taking
resources away from other key tasks.

So as 2021 makes way for 2022, consider these best practices for your
financial close.

1. Make Sure Your Process Is Well-Defined

If your financial close process is run by a loosely defined set of
steps or relies on the memory of those in charge, you’re not setting
yourself up for success. In fact, when the workforce changes—as it has
these past two years—you’re building yourself up for failure.

Without a distinct set of well-thought-out protocols and a defined
process in place, different people will take a different approach,
tasks won’t be collated in the same place and there will be no
timeline or benchmarks to measure progress. All of which can add time
and resources to your close cycle.

Your financial closure process should be defined, documented and
shared with the appropriate employees. This makes for a more efficient
process that generates the desired results in a timely manner.

2. Clearly Assign Team Responsibilities

If you have an entire team helping you complete your month-end close,
it’s important to ensure all of their tasks are assigned clearly—with
a back-up team member also identified for each role in case there’s an
emergency absence or someone takes time off. That need is only
exacerbated when your team is working remotely and/or spread across
the globe and not interacting as much day to day.

When everyone knows what they’re responsible for, you won’t find
yourself with work doubled over or something overlooked. Your entire
process is streamlined and resources aren’t wasted along the way.

3. Start Early

Even if you’re 100% comfortable with your company’s financial closing
processes, it rarely makes sense to wait until the last minute to get
them underway.

Even if you think you only need a day or two at most, don’t wait until
the last minute. Roadblocks always come to light, such as departments
that are late sharing expense data or missing loan statements.

When you start early, you can set aside time every day to inch closer
to your end goal. And that’s preferred to finding your back against
the wall at the end of the month, quarter or year.

4. Streamline Your Data Collection

One of the biggest challenges you face during financial closing is the
ability to collect the necessary data in an efficient and timely
manner. This challenge only exacerbates when everyone’s working in
different locations—where one department may be submitting data via
email, another via Slack and yet another via snail mail.

Implement a streamlined and universal system for data collection that
every employee and department head can use to submit the required
data. And even more importantly, hold them to it. Make them submit the
information in this fashion until it becomes second nature.

5. Automate Wherever You Can

Without automation, you’re left to manage the entire process manually.
That includes collecting information from employees, inputting data
and calculating expenses and revenue—and that’s just the start.

Automation driven by financial close management software allows you to
move more quickly and efficiently, which saves you time and reduces
the risk of errors.

Can you automate financial closing processes from beginning to end?
Probably not. There are times when manual input is required. But you
can definitely automate to the point where you are undoubtedly saving
time.

Closing Thoughts

With these best practices in place to fuel your month-end financial
close, you can be prepared for any immediate, urgent or unforeseen
challenges that present themselves in your workplace. The goal is to
keep your closing cycle moving like clockwork, no matter what 2022
has in store.

Learn how Vena can help add efficiencies to your financial close.