How you can achieve a stress-free month-end close at last

When was the last time your finance team enjoyed a stress-free month-end close? 

We’re going to hazard a guess that your answer might be: “Never.”  

It’s not much of a guess really, because iplicit commissioned some research on the subject. Our survey revealed that a lot of finance teams are still slogging away to close down the past month when the current month is half over. 

For many organisations, month-end is not so much a process as an ever-growing time sink. 

Read on for some ideas about how you could lighten the burden – and details of a webinar that will help. 

Our research into how long month-end is taking 

iplicit asked 1,000 finance decision makers in medium-sized UK organisations about their finance operations. You can read the results in a free report, Adding to the Pressure: A Survey of 1,000 UK CFOs on the State of Their Accounting Software. 

When we asked how long it took to produce month-end accounts, we found: 

• 86% of finance decision makers said it takes longer than three days – up from 72% the previous year 

• 55% said it takes more than a week – up from 39% 

• Almost a third (30%) said it can take more than two weeks (up from 17%) 

• 10% said it takes longer than three weeks (up from 13%). 

So, the situation is getting worse, not better. And the ever-increasing drain on time and efficiency brings costs to the organisation and to the people in it. 

The costs to a business of slow month-end 

The most obvious cost to your organisation from these protracted month-end ordeals is the sheer waste of time. For a large number of organisations, one month’s finance work dominates a big chunk of the next month.  

That means finance teams are spending more time looking backwards than forwards. Planning and budgeting have to be squeezed into the hours that remain after all this processing is finally done. Day-to-day decision making is hampered because senior managers and budget holders can only draw on data that’s weeks out of date. They are often flying the business blind. 

The human cost of month-end pressures 

Overwork and stress are serious problems in the finance and accounting professions.  iplicit's research showed just how serious.  

• 40% of respondents said they feel stressed often or all the time 

• 42% are sometimes stressed 

• 56% said they work at least six hours each month in excess of their contract 

• Only 7% said they never work longer than their contracted hours. 

That means more than eight out of 10 finance leaders are running the health risks that come with stress and burnout. Not many people will want to join the profession on those terms, which helps explain why 80% of respondents were concerned about a lack of new talent. 

The problem: Why month-end is a never-ending struggle 

It’s not just that there’s more work to do as your organisation develops. It’s also that the work becomes more complicated in nature. 

Some of the reasons for a lengthy month-end close include: 

Chasing down missing information. You can find yourself running around your organisation (sometimes literally) in pursuit of missing data. Customers might not have been billed for goods or services provided.  Expenses could be lurking on people’s desks or in their inboxes awaiting approval. Purchase invoices could be stuck in the system pending authorisation from budget holders.   

Complicated manual calculations. Some of finance’s most complex tasks are still done the hard way in many organisations. Perhaps you need to journal for accruals and deferrals.  You may need to prepare VAT returns as part of the month-end close. Intercompany eliminations can be laborious work as you manually match transactions in two sets of accounts. Fixed asset management can be tortuously time-consuming as you apply depreciation in spreadsheets.  

Incompatible systems. If different systems don’t speak to each other, or if some finance processes still involve paper trails, you’re multiplying the work needed at month-end. Perhaps you’re pulling information from a CRM or point of sale system and rekeying it, or perhaps someone has to enter values from paperwork into the finance system.  Every point where data entry is required is an opportunity for human error as well as inefficiency. 

The solution: How finance teams are fighting back  

The gulf between those organisations that prepare and submit their month-end accounts efficiently and those that don’t is set to get wider.  The sharpest teams are adopting better systems to drive substantial time savings and efficiency gains. 

If you haven’t recently taken a look at the alternatives to your software system, it’s likely you won’t know what “good” can look like. But smarter finance systems contain the tools that can slash the time devoted to month-end. 

Automating manual processes. Increasing automation will gain you some easy wins, saving large amounts of time on routine processes like bank reconciliation and accounts payable.  Automation can also take care of some of the most complex tasks facing the finance team, including revenue recognition; capitalisation, depreciation and amortisation for fixed assets; and intercompany transactions and eliminations. All you need to do is review the output. 

Integration between systems. Tedious, error-prone rekeying of data can be eliminated if software systems speak to each other.  

Easy reporting. Flexible software can present exactly the management information the user needs to see. Reports can be produced in a format tailored for the intended audience, ready for scrutiny by budget holders, the senior leadership or auditors.  

Month-end no longer needs to dominate the life of the finance team. For actionable insights into how you can improve your month-end processes, you can join industry experts in a webinar being hosted by iplicit. 

The event will show how processes can be automated or simplified, delivering complete and accurate data to the people who need it straight away.  

Join iplicit’s webinar on month-end 

Join our webinar Month-End: Without the Mayhem on Wednesday, 5 March, 11am. We’ll examine the causes of month-end reporting delays and show how you can streamline processes, reduce stress and reclaim your valuable time. You can sign up here.