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How to speed up the month-end close process

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How to speed up the month-end close process

Management accountants can be their own worst enemies. Why? Because they always deliver month-end reports even though it can be a particularly time-consuming process. That’s their job and because most finance people are diligent and task orientated — they get the job done.

What does the month-end process look like in your business?  

Does your finance team spend a lot of time pulling data from your enterprise resource planning (ERP) system into Excel spreadsheets, then manipulating it into a standardized format? Is there a lot of wasted effort, double-checking and renaming? For many, the process of preparing financial reporting data is a huge time waster, meaning less time spent on value-add activities like analyzing the data and meeting your month-end closing date. A modern finance solution allows the accounting department to quickly customize and automate financial statements, reducing the end-of-the-month close from days to hours.

According to the American Productivity & Quality Center's ( APQC’) General Accounting Open Standards Benchmarking survey, 2,300 CFOs from different companies were asked about their “cycle time to monthly close”. The results showed the bottom 25% said they need 10 or more calendar days to perform the monthly close process. The top performers, or the top 25%, can wrap up a monthly close in just 4.8 days or less — about half the time of the bottom 25%. At the median are the organizations that need 6.4 calendar days to close out a month’s books. 

The average company takes 6.4 calendar days to complete the month-end close.

American Productivity & Quality Center

Speed up the close and make the reports more accessible

The Phocas business planning and analytics platform includes financial statement software that automates the creation of profit and loss (income statement), balance sheet and cashflow statements. The financial statement software is built on a business intelligence foundation, pulling the numbers directly from your ERP into structured, up-to-date statements that offer instant answers, any time.  

Finance teams can freely explore financial data and drill down to transactional level (without touching the general ledger) in just a few clicks. Insights can be visualized with unlimited custom dashboards, charts and graphs, then shared with branches, divisions or individuals. Making it easy to connect more people to the financial health of your business.  

Access and security are defined at a user level, enabling the finance team to quickly build financial statements customized to users’ access. So, branch managers can see information relevant to their branch, and management can see information across the whole business. 

Statements can also sit across one or many ERPs so leaders can view the individual company, branch, regional performance and even the consolidated performance when required. The benefit of using this software means accounting teams only need to build the report once and then it automatically updates throughout the month to provide a real-time view of financial performance. 

Now that preparing the financial statements is faster and simpler, the finance team can move away from manual number crunching and spend more time on in-depth analysis and facilitating more informed business decisions. By preparing financial statements within a data analytics environment, you can quickly compare statements from one traditional period or outside of these timeframes - say one week to the next. 

Complete financial close from anywhere

Although the finance team is data-intensive, they can be slower to adopt newer technologies compared to other departments in an organization. This can result in a reliance on the IT department to create templates to extract various reports, build a smooth connection between the ERP and Excel spreadsheets, and to integrate technical features.

While working from home, it can be+ difficult for the finance team to communicate with the IT team in a timely way. Financial software is like an efficient assistant for the finance team that reduces the reliance on IT and enables accountants to finalize month-end close from anywhere. While the ERP data remains under the tight control of the finance team, the software transforms how the finance team handles the output received from the ERP.

Financial software automates the process involved in the preparation of financial statements and reports required by decision-makers. It extracts data from one or more ERPs in real-time and reflects the latest figures across the reports and dashboard. The finance team doesn’t have to repeatedly log in to the ERP to download the latest reports. 

Case study - Whiting Holdings

To monitor the performance of its business, Whiting Holdings, an Australian steel distributor, consolidated all its financial, sales and inventory data into one platform. By harnessing technology and implementing data analytics, the finance team automates its month-end and statutory reporting which helps get to the source of the data faster and make clear decisions.

Finance Project Manager, Ingrid Vanlangenberg works across finance and IT and is always looking for ways to drive efficiency within the business. By harnessing technology and implementing data analytics, the finance team automates reporting which saves on administration tasks so they can dig into things that make a difference - like margins.

“Phocas has created a lot of efficiency in our finance team and we've actually reduced the number of days it's taken to roll out those reports from about ten days to about five,”

Ingrid Vanlangenberg, Finance Project Manager, Whiting Holdings

Ingrid also likes the Phocas dashboard tool.

“Dashboards are a great way to visualize the data and they're fantastic in that you can drill down further into that graph and go right into the database and obtain further information. Phocas gives us those pricing trends. And the analysis enables us to make key decisions to manage our inventory levels and slow-moving stock," says Ingrid.

“The price of steel fluctuates, and margins are tightening. Demand is dependent on the health of the construction industry, and in the current market, distributors don’t want slow-moving stock.

To find out more about automating your financial statements and reduce the month-end close process , download this ebook, Modern Financial Planning and Reporting.

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Written by Lindsay Harrison
Lindsay Harrison

Lindsay is an experienced writer with a passion for translating complex content into plain language. Specializing in the software industry, she explains the importance of data access and analysis for all businesspeople, not just the data experts.

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