Month-end close is a critical but arduous process that can become a CFO’s worst nightmare. Countless hours are spent manually reconciling accounts and preparing financial statements, leaving little room for focusing on strategic initiatives. However, there is a solution!
In this blog, we delve into the prerequisites for accelerating the month-end close process and shed light on the game-changing benefits of having a fractional accounting team at the helm. Discover how CFOs can reclaim valuable time and drive efficiency and growth like never before.
Clear-cut responsibilities for your team members:
One of the most critical prerequisites for accelerating month-end close is to have clearly defined roles and responsibilities for every team member. CFOs should ensure that everyone in the accounting team understands their duties, and that working together towards the same objective is a priority. By clearly defining roles, there is accountability in the completion of tasks, which can help with accuracy, hence accelerating the whole process.
Efficient systems:
Process automation is another important factor in accelerating month-end close where CFOs implement the latest accounting software and technology to perform daily tasks and generate reports. Accounting software helps with earlier detection of accounting errors which maximizes accuracy in reporting even though CFOs still need to make sure that the software is always up to date for better results.
For instance, Quickbooks Online can be a useful tool for automating processes like reconciliation of accounts, preparation of financial statements, carrying out complex calculations of amortization and depreciation. Depending on industry, accounting software adds simplicity to the preparation of financial statements and even generating reports with a click of a button.
Accounting software eliminates delays that occur when the team has to manually reconcile accounts, perform complex calculations in the preparation of financial statements. CFOs can also use cloud-based accounting software to streamline processes and make it easier to collaborate with other team members for easy monitoring of progress during the close process.
Consistency in processes:
Consistency is key to ensuring that account reconciliations are complete and accurate within the stipulated time frame for the completion of the close on the expected date. Implementing standardized accounting processes allows for easier identification of bottlenecks or areas for continuous improvement, further accelerating the month-end close process. Therefore, it is crucial for CFOs to have their accounting teams follow consistent procedures when preparing monthly financial statements.
Timely reporting:
CFOs should ensure that their team submits data for the month, ahead of time so that financial statements are produced in a timely manner. Irregularities and errors can be identified and rectified earlier which eliminates the task of making corrections later on causing delays in the close process. Delaying the availability of data delays the completion of month-end reports hence the need to set a standard on the timeline for submission of all accounting information.
One of the most effective ways for CFOs to accelerate the month-end close process is by outsourcing accounting tasks to a fractional accounting firm like Bright Balance Accounting. A fractional accounting team can help CFOs with unending accounting tasks including bank reconciliations, general ledger maintenance, account reconciliations, financial statement preparation, and more. By outsourcing these tasks, CFOs can free up valuable time and resources to focus on other strategic initiatives.
Month End Close Efficiency: The impact of Fractional Accounting
- Timeliness: Producing monthly reports on time becomes achievable with fractional help, as it provides additional capacity that can be utilized in order to speed up the completion of financial statements. Fractional teams provide CFOs with additional capacity that is always available to help with any rising tasks or increases in workload in the face of rapid growth.
There is a significant risk of missing deadlines for month-end close if your in-house team lacks the capacity to cover any additional work that may arise as a result of rapid growth.
CFOs will oftentimes search for additional staff to hire internally which can be a costly and time consuming task that can sometimes prove futile. Meanwhile, their team falls further behind on missed deadlines for month end-close. Hence for CFOs, relying solely on an in-house team poses the risk of slowing down month-end close and missing deadlines for monthly financial reporting.
- Efficiency and accuracy: Fractional teams can help CFOs identify and implement suitable process automation systems based on industry and can help ensure that software is always up to date. Process automation, if implemented correctly, can speed up processes and help with consolidation of accounting data that is used in the month-end close process. Automation adds simplicity to data consolidation and validation which eliminates delays in presenting reports. Fractional teams are also proficient with software that can help with team collaboration during the close which makes it easier for CFOs to monitor progress and keep track of their team members.
- Consistency: Maintaining consistent procedures and routine leading up to the close is crucial for ensuring accuracy in your results. Fractional accounting teams have a mapped up plan in place for organizing material for handling the close which makes it easier to check all the boxes necessary to meet the prerequisites of a successful close.
Consistency in recording accurate accounting entries on a daily basis ensures that all information needed for the close is readily available and accurate. With the support of a fractional accounting team, accurate record-keeping becomes more efficient, eliminating bottlenecks in the preparation of financial statements.
- Cost savings: Fractional accounting gives CFOs the opportunity to save on the cost of idle time they would incur with full time staff. During slow periods where cash flow volumes are lower and there is a decrease in workload, the cost of having full-time staff still remains the same. With a fractional team however, CFOs only incur the cost of the exact billable hours spent completing tasks.
- Eliminates the challenges associated with managing staff: The month-end close process requires CFOs to closely monitor their team to ensure everyone is working towards meeting the deadlines. Managing the team during the close process can be a waste of valuable time which CFOs could devote to other strategic tasks crucial for the business. It is simpler for CFOs to hire a fractional accounting team who take full responsibility for monitoring their team and make sure that the month-end close process is complete within the designated time frame.
- Ability to get additional help to meet other accounting obligations: Fractional accounting comes with extra capacity that is always available for covering any excess in workload. Even though CFOs have an option of hiring full-time accountants, searching for fitting talent can be time-consuming, and oftentimes the efforts can prove futile. Without immediate action to have additional capacity, the team can fall behind on meeting deadlines for the close, and sometimes they can produce misleading reports due to the inevitable risk of errors.
With fractional accounting, CFOs are relieved of the task of hiring additional staff whenever they need additional capacity and there is also a reduction in the risk of their team being overloaded with work and making errors. Having a fractional accounting team like Bright Balance adds simplicity to staffing for CFOs thereby removing bottlenecks in accelerating the month-end close process.
Accelerate Month-End Close with Bright Balance Accounting: A CFO’s Ultimate Solution
The Bright Balance Accounting team prioritizes timeliness, efficiency and accuracy at every stage of the close process. We value accountability in our work and also take full responsibility in making sure that our team members present accurate financial statements on time. Bright Balance helps CFOs with managing team members as they strive to achieve efficiency on month-end close, freeing up valuable time to focus on other strategic initiatives.
At Bright Balance Accounting, we prioritize maintaining accuracy at every level of our operations. Our unwavering commitment to detail and precision forms the cornerstone of our main strategy, playing a crucial role in our entire accounting process consistently.
The Bright Balance Accounting team also offers an additional advantage of blended rates, where most of the recurring tasks are assigned to an offshore team that bills lower rates per hour. This provides an opportunity for CFOs to save on the cost of hiring additional capacity when needed, while acquiring a vast amount of expertise to help in accelerating the month-end closing process.
By outsourcing accounting tasks to the Bright Balance team, CFOs can streamline the month-end close process and ensure that their financial statements are produced in a timely and accurate manner. Contact Bright Balance Accounting today to learn more about how they can help accelerate your month-end close process.
