The monthly close can be a stressful, high-pressure time for accounting and finance departments. The accuracy and completeness of the financial statements produced during this process are critical for successful decision-making, market forecasting, and planning future strategy. Accountants are responsible for every number on that final balance sheet; when those numbers are produced manually, the process becomes a time sink for your accountants, output reliability is low, and that risk of error tanks confidence. A proven way to improve performance during closing is ERP-driven automation.
The close process involves a laundry list of menial, repetitive tasks and extremely complex calculations. In many businesses, the whole close process is performed manually by staff. This highly repetitive, calculation-intensive process is exactly the type of job that automation is perfect for. It comes as no surprise then that more and more businesses are turning to ERP solutions to streamline the monthly close by automating many of the tasks involved.
To improve output reliability, you need to look for ways to reduce risk. Here are three factors that can introduce risk to the monthly close:
Human Error
Balance sheet substantiation is a task that requires high accuracy and watertight integrity. Miscalculations during the closing process directly influences the business’ understanding of the market and how best to maneuver within it. If the process is largely manual, the ever-present risk of human error means the process is inherently error-prone.
Is there a transaction logged in the ledger that hasn’t been pushed through to the spreadsheet? Were these numbers calculated correctly? Did I miss something? Intense manual processes will always leave you and your accountants worrying something may have gone wrong.
ERP solutions come with tools that allow you to automate many of these manual processes. You can set up alerts and notifications to ensure every transaction is logged properly. Calculations can be performed as soon as the necessary inputs are available and updated when changes occur. Automating these menial, repetitive tasks allows your accountants to focus their time and skills on other work.
Massive Legacy Documents
Many accounting processes involve appending new transaction data at the end of already existing files. We’ve all felt what it’s like to open a bloated file with dozens of tabs containing information for 10 years of purchases. You only need a small bit of that spreadsheet, but the process of finding and parsing it is a tiring task in and of itself.
ERP tools make it easy to filter and manipulate the exact data you need automatically. You no longer have to manually extract the relevant bits of your spreadsheet to perform critical calculations. In fact, you can automate the whole process from data extraction to formula crunching.
Errors in the Formulas
Having a formula just one row off from where it’s supposed to be can create errors that cascade down throughout entire swaths of the spreadsheet. As the spreadsheets get larger, the slightest mistake can lead to massive miscalculations and significant errors. With accountants responsible for several spreadsheets, the risk of a mistake in a formula is worthy of attention.
Using ERP tools to automate formula calculations means you no longer have to worry about your accountants compromising your data by dragging something to the wrong cell or accidentally deleting an entire column. Once you’ve set up your automated processes, you can rest assured knowing that the right data is going into the right spot and the numbers your system is producing are accurate and reliable.
A robust ERP solution allows your staff to allocate their valuable time to more meaningful work instead of number crunching and data input. Instead of manually punching data into a workbook over several days, ERP solutions allow you to systemize the entire process and finish that same job in almost no time at all.
You also get the added benefit of reduced risk, resulting in improved overall confidence and reliability. Once your processes are set up and automated, you no longer have to spend your time worrying about someone accidentally mistyping something and ruining an entire spreadsheet. You can sleep easier knowing the financial statements your system delivers are accurate and complete.