Is Your Time to Close The Books Up to Par?
Closing the books is both a blessing and a curse for most companies. The end of the process reveals essential information about the company’s past performance and future prospects. But arriving at those insights requires a lot of time, input, and staff resources.
In order to get the most from the process, companies must strike a careful balance. Rushing to close the books exposes the process to errors and omissions. Conversely, investing too much in the process distracts from other efforts and makes decision makers wait longer for important insights.
Identifying a perfect middle ground is not a precise science, but best practices do exist. A recent survey of 762 small and mid-sized businesses explored how the respondents closed the books. Some companies excel at it while others struggle significantly. Most, however, have learned to optimize the process to meet their own agenda. Explore some of the key takeaways from the survey to evaluate whether your own time to close is up to par:
More Staff is Not an Advantage
79% of the respondents close the books with fewer than five staff members. Assigning more staff to the project might speed it up, but it could compromise operations in the process. That’s why it’s important for the staff who are closing the books to have tools that maximize their efficiency and productivity.
Speed and Certainty are Both Important
A quick close seems like an advantage, but getting everything done in under a day means that mistakes are inevitable. Respondents identified 2-5 days as a better time frame. That way the staff who are closing the books don’t feel pressured, and there is enough time to be careful and comprehensive.
Manual Inputs Should be Kept to a Minimum
Manual inputs require extra time and oversight while inviting errors and inaccuracies. That is why two-thirds of the respondents rely on 10 inputs or fewer. Having a platform that integrates more information in one place eliminates the need for manual inputs and expedites time to close across the board.
The Cloud is the Preferred Solution
The majority of respondents utilize cloud-based solutions to close the books. Most chose the cloud because of its high availability, meaning data, applications, and insights are accessible on-demand. They also rely on automated tools housed in the cloud to accelerate reporting and optimize the outcomes. The consensus is that for closing the books specifically and for accounting generally, the cloud is the only option worth considering.
How does your own time to close compare? Does your process feel effective, and are you meeting the same benchmarks as others? If not, a newer and better approach is more accessible than you realize.
Sage Intacct is a financial management solution designed for accounting and finance. It offers a number of upgrades, and many apply directly to how companies close the books, apply the insights, and repeat the process. To learn what this would look like for your business, contact Spire IT.