You’ve probably been here before: It’s the 10th of the month, and your inbox is still overflowing with questions about incomplete reconciliations. You’re following up with other departments for the third time and still no response. It’s starting to feel like you’ll never be able to close the previous month.
Sound familiar?
Most accountants know the pain of month-end close delays, making the close one of their most dreaded tasks.
But just because that’s the way it’s always been doesn’t mean you can’t change it. In fact, with a few updates to your close process and tools, you can turn the month-end close into an easy, breezy task.
Let’s look at the most common reasons for close delays and how to achieve a faster month-end close.
Why your month-end close is taking so long
An effective month-end close should be complete in six business days or less. But the reality is that only 53% of companies are able to close in that timeframe.
The other half are taking much longer, meaning their accounting departments spend weeks manually reconciling statements, doing flux analysis, and other time-consuming tasks.
This timeframe can get even longer when there’s not enough bandwidth on the team—a challenge most companies today are familiar with due to the shortage of accounting talent.
These delays make the month-end close a nightmare for controllers, who are trying to juggle competing business priorities, ensure accurate financials, and maintain team morale.
Let’s take a closer look at the root causes of delays in the monthly close process.
Siloed data
Here’s another scenario you might recognize: You have five different spreadsheets open on one screen, a bank statement on the other, and you still can’t find the data you need. So, you email a colleague asking for the data, and they send you yet another spreadsheet.
When you have different versions of financial data across spreadsheets and systems, it's almost impossible to ensure accuracy. This slows down your close, and for controllers, it leads to a lack of control and oversight of the process.
And if that’s not stressful enough, disorganized data and documentation also causes headaches during audits as your team wastes time trying to track down the information auditors need.
Manual processes
Another challenge of this process is that accounting teams are spending a lot of time entering data manually. This is not only a poor use of their time and skills, but it also leads to inevitable manual errors that take additional time to address.
A reliance on spreadsheets creates inefficiencies and delays that get in the way of completing the close in six days or less.
Lack of standardized workflows
Creating a standardized workflow for your month-end close might sound like yet another time-consuming task to add to your to-do list.
But think about how much time you waste tracking down information from other departments, like accounts payable and accounts receivable, to finalize reconciliations. Or think about how much time passes as you wait for a response when roles and responsibilities are unclear.
Inconsistent workflows lead to errors and delays that add up to an unnecessarily long close timeline. A new process may take time to implement, but once it’s in place, your monthly close will go a lot smoother, saving your team days of work each month.
Inadequate tech stack
If there’s one culprit for all the challenges we just discussed, it’s an outdated tech stack.
Relying on a combination of spreadsheets, your enterprise resource planning platform (ERP), close software that forces you to look outside your ERP, emails, and sticky notes on your desk will never lead to a better process.
Outdated and disjointed systems create data silos, require a lot of manual data entry, and get in the way of efficient processes.
This is why controllers often feel like they’re in "firefighting mode," spending a lot of their time trying to identify and resolve bottlenecks.
The lack of a centralized place for your process means you don’t have a real-time view of the progress to help you understand what you need to unblock to move things along.
The cost of a slow month-end close
A slow month-end close has real costs for a business, including:
- Lost time and productivity: Accounting teams dedicate days or weeks to the close each month, meaning they let other tasks fall behind. And spreadsheets make the problem worse—teams relying substantially on spreadsheets take about two days longer to close than those who don’t. That may sound small, but it adds up in resources used and the opportunity cost of sacrificing strategic work.
- Team burnout: Long days spent on repetitive manual tasks take a toll on accounting teams. Nearly 60% of accountants report experiencing burnout during busy seasons. And when leaders don’t prioritize work-life balance, they can see up to a 25% increase in employee turnover.
- Business implications: A lengthy month-end close can create a domino effect, with delays compromising decision-making because leaders don’t have real-time financial data. Plus, it can create audit challenges and erode stakeholder trust when your team can’t produce accurate, up-to-date financial reports.
How to fix your month-end close process for a faster close
If reading the common challenges and cost of your slow month-end close is making you break into a cold sweat, don’t worry. We can help you change things up.
If you’re working with a small team, you may think the only possible solution is to hire more staff, but that’s not the only way (and sometimes it’s not the best).
Optimizing the process and adopting the right tools can be even more effective than increasing headcount. And it doesn’t have to be an intimidating task.
Here we’ll give you four steps to start transforming your month-end close.
1. First, let’s audit your current process
Understanding your current challenges is the only way to overcome them.
Start by auditing your current month-end close process to identify workflow gaps, manual bottlenecks, and high-error tasks.
Ask yourself the following questions to help you identify areas of improvement:
Workflow:
- Are workflows clearly documented and accessible to the team?
- Do you encounter frequent bottlenecks or delays in specific areas?
- Are tasks properly sequenced to minimize downtime?
- Are there clear guidelines for recurring tasks and approvals?
Data management:
- Is your financial data centralized and easily accessible, or is it duplicated between your ERP, your close software, and spreadsheets?
- Are there discrepancies between data sources that require manual reconciliation?
- Have you established clear ownership for each data set and task?
Tech stack:
- Are you relying heavily on manual spreadsheets for key tasks?
- Do your current tools live inside of your ERP or accounting software, or do they require clunky integration and duplicated data?
- Are you using automation for reconciliations, data entry, and other repetitive tasks?
Accuracy:
- Are there frequent errors in reconciliations or journal entries?
- Are you confident in meeting compliance standards and audit requirements?
- Do you encounter significant rework due to errors found late in the process?
Continuous improvement:
- Are you regularly reviewing and updating your workflows for efficiency?
- Are you monitoring close process metrics (e.g., time to close and error rate)?
Once you’ve answered these questions, you can start to prioritize the most urgent areas for improvement, like your tech stack.
2. Next, evaluate and invest in technology that works for you
As you audit your process, you may find that software and tools are a major source of bottlenecks and errors. For example, if you’re using software outside of your ERP, you may be wasting time, duplicating data, and introducing errors.
That’s why it’s so important to create a tech stack that centralizes your financial data and allows you to execute the close in the right place: your ERP.
To achieve this, you must adopt accounting software solutions that are embedded in your ERP.
For example, if you use NetSuite, native apps like NetCash and NetClose allow you to complete the entire close process, from bank reconciliation to flux analysis, without leaving your ERP.
This eliminates context switching between platforms, and as a result, you’ll have visibility into the entire process, minimize duplicate data entry, reduce errors, and gain confidence in your data.
3. Then, automate where it matters
Once you’ve adopted the right close accounting software, you can take advantage of automation and AI features to significantly speed up the process.
There are a few areas where automation and AI can truly transform the month-end close and help you complete it well before the six-day mark:
- Data entry: Manual data entry is time-consuming and error prone. Automating data entry from invoices and receipts eliminates this step and increases accuracy.
- Bank reconciliation: Manual bank reconciliations can be the most time-consuming task in the process. But with automated reconciliation, you can go from creating or matching thousands of transactions to reviewing a handful of discrepancies.
- Flux analysis: Some accounting teams dread flux analysis (a.k.a. variance analysis) so much that they skip it altogether. But it can provide valuable insight, and you don’t have to do it manually. With the help of AI, you can automatically generate flux analysis explanations and create a clear audit trail.
4. Now, uplevel your team
Once you take the most monotonous parts of the monthly close out of your team’s hands, you’ll find that they have time for more valuable work.
Use this time to train your team in new skills, get new certifications, and provide valuable analytics to the office of the CFO. This allows you to develop a more mature accounting department that can help steer the business with reliable data and strategic insight.
Transform your month-end close with Netgain
Your month-end close woes come down to a disjointed process taking place on disparate systems.
So, the best place to start fixing it is by auditing your tech stack and considering what solutions you need to get the process back on track.
The right close accounting software will help you:
- Centralize your data
- Create a consistent workflow with clear segregation of duties
- Automate the most time-consuming manual tasks
- Generate accurate, up-to-date financial reports
- Give your team more time for high-value work
Netgain’s close accounting solutions offer a smarter way to close, enabling accounting teams to close faster, reduce risk, and improve data accuracy.
Explore how NetClose and NetCash can transform your process and your team. Get a personalized demo.
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