With the year-end coming nearby, the yearend closures have also gotten the finance and accounting experts on their toes. And if you have an in-house accounting expert who hasn’t prepared for the closures in advance, then you must be going through a stressful period.
Everybody is keen on closing their books properly without missing out on details that can make the tax season hectic in the near future. Maybe you think that it is okay to take stress now then later, but we have a way in which you and your accountants can relax.
Yearend closures shouldn’t mean stressing your nerves and burning your eyes out. We tried to bring calm to this stressful environment for you. In order to avoid the challenges, you must first know them.
What are the various yearend closures challenges?
Yearend closure challenges are nothing but the tasks which were overlooked or skipped the manual sight earlier. These issues are often the tiny mistakes or errors which started earlier in the fiscal year and grew bigger eventually. You must be aware of these year-end financial challenges which bring nothing but stress to your experts:
1. Any financial surprise during the fiscal year
2. Late derived statements or incorrect noting of data
3. Gaps occurred due to miscommunication
4. Wrong breakdowns of the payments
5. Staff overloaded with work pressure
6. Lack of knowledge about using software or other technology
These challenges can be avoided if found earlier.
Read the early warning signs
Many of the challenges do not come unnoticed. The year-end closing challenges also come with various warning signs or red flags which can avoid a stressful situation.
1. Financials taking time in getting delivered or delayed
2. Journal adjustments made during the year
3. Difference between the findings of internal and external auditors
4. Focused discussion about the past results rather than the present and future
5. Delay in doing the month-end closures
6. Long working hours for the finance experts
7. Hardly any expert following the year-end adherence
8. Having no standard division for the Chart of Accounts
Keep up with the forthcoming financial challenges
It is not just the signs that were missed but also the upcoming financial changes which can create a stressful year-end closing process. The firms, accounting and financial experts as well as the staff should be prepared for the challenges that might hit them in the next fiscal year. Below are some of the challenges you must prepare for while going through the year-end closures.
1. Another year worth of data and information needs to be stored
2. The regulatory changes need proper response from the firm
3. Along with the trends, the business strategies also need to be changed
4. Handling more competition
5. Adopting the new technologies
6. Managing the cost
7. Extending the workforce
Is your Year-end closing process ready?
Year-end closing may seem like a one-time event that happens around November or December, but this is not the case at all. It is an on-going procedure, which needs to keep going on. A lot of experts, thus, prefer month-end financial closings as well.
In order to ensure that you are ready for the year-end process, you need to follow the below-mentioned steps:
1. Know the position of your business and company through the financial books and see where you want to take them
2. Check whether you have the right experts and right technology for your year-end closure process
With these two things, many companies can get done with their year-end closing process within a number of days. However, lack of clarity in this can lead to delayed and stressful year-end financial closures. Therefore, assessing and reviewing the procedure is also a crucial part of the procedure.
Know the year-end closing tools and technologies
Errors often happen during the manual processes and so, it is better to go for automated tools and technologies for the year-end financial closing process. Don’t worry whether the technologies will fit your requirements as there are many options, such as:
1. You can get software that manages the financial close workflow along with account reconciliations and disclosure management.
2. Look out for Master Data Management Solutions, also known as MDM solutions.
3. Ask your experts to work on Enterprise Performance Management platforms. The EPM platforms help in directly integrating with the transaction system and also assist in supporting complex consolidations.
4. Moreover, there are Robotic Process Automation (RPA) also available to reduce the manual tasks and provide automation support.
5. Rest; there are many cloud-based accounting applications which can significantly help in managing the functions of all size organizations. They come with robust features to assist many manual tasks as well.
All these kept in mind can make the year-end closing process much easier than it might seem at the beginning. There are solutions created to ease the stress time; so why not use them to make the most of your time. In order to make sure that you haven’t missed any point in the process, read The Year-End Accounting Checklist Every Business Must Follow.
Written by – Priyanka Rampal
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