4 Key Tips to Streamline Your Accounts Payable Month-End Close

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Key Takeaways

• The answer to streamlining your remote close lies in empowering the accounting team and driving efficiency in spend management. 
• The monthly close process is made up of many repetitive or manual tasks, and requires the finance team to access key, accurate financial statements and records.
• With the advent of continuous accounting and modern software, it’s possible to automate much of the month-end close process. 

Forty-three percent of surveyed executives on a recent NetSuite webinar said that they could not perform a remote close as effectively as one in-office. But bringing the finance team back to the office isn’t necessarily the answer. 

Month-end close is already a difficult and time-consuming process for accounting teams working on-site. In the office, 82% of finance teams considered it a negative experience. Completing month-end close remotely adds a layer of complexity. And while some finance teams may aim to just “get through” remote close before everything returns to normal, the truth is that remote work isn’t going anywhere, and focusing on in-office teams won’t help. 

The fact is that reducing the month-end closing process is critical to optimizing productivity and minimizing risks related to spend. 

Having the right software and processes for your remote month-end close is more important than ever. With efficient systems in place, finance teams can streamline their remote and in-office close. Here are 4 tips to do just that.

1. Increase communication

Being remote means you can’t physically walk over to someone’s desk for clarification on a certain task or account, which helps prevent seemingly small inaccuracies. Instead, set up virtual check-ins and working sessions to help ensure that team members stay on track with their specific tasks during the close.

Bill Koefoed, CFO at OneStream Software, hosts team check-ins via video conference twice a day. Even if you prefer not to meet that frequently, scheduling 15-minute checkup calls and 30-minute group working sessions with team members during closing weeks will give them a space to ask questions and talk about any issues.

Here are a few best practices when running virtual calls to ensure they go as smoothly as possible:

• Require that video be turned on during video calls to retain nonverbal communication.
• Send agendas before calls to maximize your time together.
• Keep agendas brief, and use bullet points instead of full sentences.

Over-communicate with your team to reduce confusion. “Communication is the responsibility of the leader, not the led,” says a Teampay member. “Over-communicating needs to happen when you don’t have in-person communications.”

2. Review the process before finance

When it comes to month-end close, there is a heavy focus on the finance department. But what about everything that happens before the reconciliations?

In a distributed business environment, employees outside of finance are making purchases every day. Streamlining the way they go about doing so will make finance’s job easier when the end of the month rolls around.

This starts with giving employees a central hub to request funds, receive payment methods, and submit receipts. Understand what information is relevant to employees and make it easily accessible by anyone, from anywhere.

Embedding your purchase request process into employees’ existing workflows encourages adoption because users don’t have to navigate a separate system. Use tools that automatically guide employees through the buying process and alert them when action is required.

3. Pull tasks forward

In traditional accounting cycles, finance teams have to wait until the end of the month to know how much has been spent across their organization. Because of this, they often take a rearview mirror approach, conducting analysis using last month’s numbers.

The distributed nature of remote work demands a real-time approach that allows finance teams to understand spend activity across the company at any given moment. This requires finance teams to proactively collect spend data, rather than doing so after the fact. As Megan Gallagher, Sales Engineer at FloQast stated at the Agile Finance Summit, “Having an efficient close isn’t about trying to cram everything into the 5 or 10 day close accounting period, but identifying tasks that can be accelerated and pulled out of that time frame.”

For example, over 60% of finance professionals say they are forced to conduct “best-guess accounting” during month-end close. Requiring employees to obtain pre-approvals and code purchase requests upfront eliminates manual guesswork and frees the team from frustrating back-and-forth.

“Embracing cloud-based tools is an opportunity to rethink what you’re doing and consider if there’s a better way,” said Sebastian Wagner, Controller at Argus Media. “It’s not about additional things you can do, but about how you make your existing processes more effective and efficient.”

All employees can access the cloud from anywhere, in real-time, which makes it especially useful in remote and distributed environments. By leveraging cloud-based software to proactively control spending, enable real-time visibility into spend data, and automate reconciliation, finance teams can eliminate manual tasks and share relevant information with a distributed workforce.

Furthermore, integrations between cloud platforms allow purchase request data to be automatically passed through to your accounting software. Transactions are reconciled in real-time, so finance teams have full transparency into all the spend happening across their company now, not only after the virtual credit card statement comes in several weeks later.

Cloud-based software can support your team in achieving a continuous close from anywhere. Suddenly, they have access to all relevant data from anywhere in the world, whether that be cash flow statements, balance sheets, bank statements, the company’s fixed assets, and more. And you can use the time saved from leveraging this information to conduct strategic analysis and deliver valuable insights to stakeholders in real-time.

What are the most effective solutions for streamlining the accounts payable month-end close process for businesses?

Accelerating the AP month-end close process is similar for any business—and it hinges on your tech stack. Manual labor doesn’t cut it, whether your team is working from home or at the office. 

Here are our top 4 strategies to streamline month-end close with automation:

1. Automate AP and P2P: Automating procurement, invoice reconciliation, approvals, and other manual tasks can speed up the process, reduce errors, and save time for important tasks.
   
2. Leverage real-time data: When data is synced in real-time and with your ERP, less information gets lost and it’s easier to find what you’re looking for. Furthermore, the wait for current account data is over—allowing you to initiate the close process faster.
   
3. Use rolling closes: Continuous accounting allows for rolling closes, meaning there’s less to do at the end of the month. This not only ensures more accurate accounts, but speeds up the process.
   
4. Audit regularly: Reviewing your accounts and process at least twice a year ensures that your month-close is more likely to be optimized and accurate. 

Take control of your month-close with Teampay

At the end of the day, the tools we use matter. The right accounts payable and accounts receivable software can adequately connect remote finance teams with the rest of the company and solve challenges. From cross-departmental communication and breaking down procurement silos to cloud-based data and rolling closes, a best-in-class spend management solution can take your AP to the next level.

For most firms, the biggest transformation comes from automation. Take the next step in your month-end close optimization journey and discover how our accounting automation software can drive efficiency in your company.