June 16, 2023
Finance Basics

Best Practices for a 5-Day Close

Here at Teampay, the finance team has month-end close down to a science.

In March, our finance and accounting team completed our month-end close in just 5 days, a process which we have repeated since. Streamlining our month-end close was no easy feat, but has company-wide effects. After all, the sooner the finance team closes the books, the sooner the executive team can make timely and informed business decisions.

Here are five tactical steps and best practices you can use for a faster month-end close.

1. Implement a month-end close organizational platform to create checklists, collaborate, and to assign preparers and reviewers that works best for your team

Our finance team tried several tools before finding one that worked best for us, including project management tools not designed for month-end close and other platforms like Google Sheets and Calendar. While project management tools were appealing in theory, we found ourselves wasting time unchecking the tasks and moving the due dates from Saturday and Sunday to Monday and Tuesday. In order to save your team time, you need to find a month-end close -centered platform. Here's a list of some month-end close platforms to consider. When evaluating a month-end close platform, make sure to look for the features that impact your team the most. Our major pain points were around scheduling and checklists, so we focused our search on a platform that would solve both of those issues for us.

2. Set a realistic goal.

It may sound simple, but by setting a realistic goal, your team will be motivated to work harder. For example, if your close currently takes 10 days, try setting the goal to 9 days. If the team achieves 9 days and there is still room for improvement, set the next close goal to 8 days. (Don't forget to celebrate the team for their hard work first! ) Ask “Why?” and work with your team to identify bottlenecks and identify how to remove them. 

3. Complete more tasks prior to month-end close.

“Continuous close” has become a recent buzzword but it's always been something our Controller, Robyn Wertman, practiced with her teams. Keeping your ERP updated daily is the best way to ensure a continuous close. Accounts such as cash, Accounts Receivable, and Accounts Payable can be reconciled weekly or even daily fairly easily with the correct integrations. This can be as simple as connecting your bank feed to QBO or selecting a billing system that integrates naturally with your ERP. If cash, AR, and AP can be checked off as reconciled on Day 1, addressing remaining areas in 4 days makes a 5 day close much more achievable. 

4. Select an all-in-one spend management platform that offers real-time transaction syncing, visibility, and flexibility. 

Our team uses our own product, Teampay, to manage our card spend, employee reimbursements, and Accounts Payable. Teampay allows us to review all non-payroll spend in one place. We can review card transactions and employee reimbursements in real-time, weekly, and semi-weekly and make updates while having the assurance that any changes automatically sync to our ERP. There is no waiting until the end of the month (or worse - the 3rd day of the next month) for employees to “submit” their card spend or expenses like other platforms. Teampay AP  allows us to process our vendor bills quickly and accurately. Our controller can even decide which Pending Approval vendor bills she wants to sync to our ERP. This allows our team to close out AP faster and with fewer vendor accruals. There's nothing worse than creating a large journal entry for costs you have in your AP platform but cannot sync to your ERP because they aren’t “approved” yet. Real-time transaction syncing makes this issue completely moot.

5. Select a financial reporting tool that is fairly easy to implement and can provide all of the reporting you require. 

Our team uses a reporting platform that provides customizable MoM variance reporting, Budget vs Actual reporting, and allows us to share reporting securely with our department heads so that each audience sees only what is needed. We also use this platform to analyze the results of the close and identify any variances that need to be reviewed. We have the capability to drill down into our ERP at the transaction level within the reporting platform. Our department heads can even drill down to the transaction level from the reporting platform with no need to have a seat within our ERP. This platform has helped our team streamline the final review and distribute results to team leaders across the organization.

Our Finance team may be small, but we don't let that hold us back! We have worked together over the past few months to determine which areas can be most efficiently closed on which day and have distributed ownership of areas to allow us to work the most efficiently. The best part of executing month-end close in a shortened timeline is that it frees the Finance team to work on strategic initiatives, further automation, and other projects that bring greater value to the business.

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