5 steps to transform your financial close
With the ever-persistent need to complete financial close and reporting cycles, it’s difficult to ensure your financial reporting is accurate and on time. It takes diligence and agility to ensure your organization isn’t susceptible to weaknesses in financial reporting – especially when you’re in a time crunch.
When you’re constantly checking and double-checking your work before certification, introducing process improvements becomes a “nice to have” rather than a necessity. There are many other reasons why departments can’t decisively address close process improvements – most likely, because they don’t know where to start.
So, here are five steps to help you begin improving your close processes:
1. Understand the process
There are many benefits that result from comprehending how your close process works while improving it:
- More time for high-value activities
- Increased teamwork and communication
- Reduced turnover
The list goes on. A strong close process improvement leads the way to departmental transformation – from historical reporting to more value-added activities as well as net cost savings.
2. Learn about close process improvements
Few managers invest significant time researching potential resolutions to issues surrounding the close. That’s unfortunate.
- Process accountability
- Quality control timing
- Communication interplay
3. Perform an assessment
Every organization is unique. As such, financial executives must perform an assessment of the more significant issues affecting their closes.
To get started, think about any process cracks between departments and tasks – often included on an Excel checklist – which, if omitted, would impact the quality or completeness of the close.
By doing so, you’ll develop an understanding of the multiple dimensions of your close processes, such as variability, documentation, redundancies and bottlenecks.
4. Make a plan
You’re more likely to make successful process improvements using a coordinated approach with a list of prioritized projects.
To ensure improvements are executed correctly, it’s essential to find a project owner for this initiative. Skilled leadership in change management with solid accounting skills are a must.
5. Take action and build momentum
Well-planned close process improvement projects can be a rewarding teambuilding experience, laying the groundwork for financial process excellence.
It’s important to begin with making quick wins. Not only will your processes improve, but you’ll build departmental momentum, increasing your chance for success as you continue to make improvements.
By beginning with a practical and methodical approach, you’ll be more likely to solve significant changes. So, how will you transform you financial close?