Month-end close process: Is yours in need of repair?

Blog - 22 Jan 2020

Your team is gearing up. Heads are down; stress-levels high. You’re fighting the clock and pressure from other departments. The chase is on for invoices.  Sound familiar? The Month-end close process doesn’t have to be a battle. There is another solution.

If you’re continually struggling to get over the line every month, it’s time to re-evaluate the way you’re working.

These are the most common signs that your Month-end close process needs repair!

Overtime and bigger budgets

If the pizza delivery man knows it’s Month-end, as your team is constantly doing overtime, it’s time to take a critical look at your process. Research from The Work Colleague of the Future indicates employees could be at serious risk by working longer hours. The study found staff who work 10 hours or more, increase their risk of a multitude of cardiovascular problems, such as heart attacks and angina, by a whopping 60%. Additionally, a FloQast study revealed that employees missed out on holidays, medical appointments, and important life events because of the Month-end.

 

Month-End

 

Furthermore, if you’re finding yourself increasingly reliant on hiring temporary staff to help with the workload during Month-end, it’s a clear sign that you need to look at new solutions. Hiring temporary staff to get you over the line costs time and money. Not only are you paying a wage, but new staff will disrupt the office day in order to learn the manual process, which is usually tribal knowledge from other employees.

Human Error

Manual processes are dependent on a human eye to ensure the accuracy of Month-end’s close. It comes as no surprise that human error becomes a very real problem for accounting teams. In fact, an MHR Analytics Twitter poll revealed 73% of people relayed they weren’t confident about their Month-end data and numbers, as well as their audit submissions.

Moreover, if mistakes do occur, it’s your job to manually trawl through a mountain of paper in an attempt to rectify the error. Paper invoices can often be misplaced or go missing. You will need to hunt down the invoice or attempt to get another copy of it from an internal department or supplier. This eats into a huge amount of time and resources that are so precious at Month-end. If you are encountering these problems, heed the warning signs. We’ve written about more consequences of human error, read them here.

 A Paper Problem

The pile of paper is growing with every Month-end. The space in your office dwindles as yet another filing cabinet is dragged into the corner to store the paper invoices.

If this sounds like something you can relate to, it’s time to ask yourself if there is another way. A manual Month-end process can be very wasteful. Many companies are looking at ways to go green and promote sustainability. The elimination of paper is a great place to start. We’ve recently written about the Environmental Benefits of Electronic Invoicing, check it out here.

Less success, more stress

A poor process can lead to a lot of stress during Month-end. Deadlines and turn around is so tight. Your staff is busying trying to chase other departments in the company to get the information they require to close the books. You could cut the atmosphere in the office as everyone is under immense pressure.

 

Month-End Stress

 

 A recent study shows that stress is a common complaint when it comes to the Month-end close. 60% of employees reported increased stress levels during the period. This type of pressure is completely counterproductive, according to research conducted by INRS. Scientists concluded that the stress of meeting targets or deadlines harmed learning and memory. It’s a serious hint that your process is need of repair.

Meager Morale

Keeping the previous point in mind, if your staff continues to do repetitive processes, under intense conditions and for longer hours, it’s naïve not to think that morale won’t be impacted. If you note morale is spiraling, you may want to take note. A FloQast study showed that 1 in 4 accounting and financial teams lost staff because of the pressure that comes with Month-end close.

A Simple Solution for Month-End

Manual entry has been disappearing from every aspect of our lives. It’s no secret as to why the mundane tasks are being replaced by technology. It’s faster, more accurate, and frees up our time. The process for Month-end close is no different.

Using automation means that staff are no longer consumed by low-value jobs and audits are an easier process. Automation can do repetitive jobs, freeing up employees to analyze the reports they have for Month-end. Through their reporting, they can identify areas where savings can be made. This, in turn, boosts morale as they’re having a direct, positive impact on the company.

Additionally, keep costs low using automation as the need for temporary staff should be dramatically reduced, if not completely eliminated.  If you do hire staff, you’re no longer reliant on tribal knowledge, meaning less disruption and more production. Want to know more about how your team will become strategic planners using automation? Read this.

 

Month-End Benefits

 

Employees can grow confident that their Month-end data and reporting are accurate through automation. Employees don’t have to chase different departments for invoices, everything is in one place on the system. This leads to a less stressed out and worried work atmosphere with manageable workloads.

On top of less stress, higher production and cost-benefit, an automated Month-end close means you’re doing your bit for the planet by reducing the demand for paper and printing.

Leave a Reply

Your email address will not be published. Required fields are marked *

Posted by

Sorcha McManigan

Procure-to-Pay Insights