What Your Month End Close Process is Missing Checklist

The month-end close is an accounting procedure that finalizes and closes out all financial activity for a business for the preceding month. This timeframe represents a well-defined period for accounting purposes. The process involves reviewing, documenting, and reconciling all financial transactions for that period. It is intended to ensure that all transactions have been properly accounted for, which allows the business to close the books on this financial activity and start a new month with a fresh set of records. Consider using Spenmo to speed up and streamline your accounting processes.

Implementing a month-end closing checklist increases efficiency and accuracy, reducing the time, effort and expense involved in preparing for year-end audits. The month-end close involves your finance and accounting teams collecting, reviewing and reconciling the previous month’s transactions bookkeeping for startups and financial activity. Digitalising your finance department by using an accounts payable automation software can unload tedious tasks off your team. This strategy can reduce human error and increase your team’s operational efficiency as they perform the month-end process.

How Automation Streamlines Month End Close Process?

Account reconciliations help you spot mistakes in your financial reporting. You can also check your account statements for evidence of fraudulent transactions. Work through your accounting systems to ensure you’re making invoice payments on time.

By the time they have collected the data, it may already be outdated. To help streamline the process, consider implementing an automation solution that instantly collects data into a centralized space. From there, everyone involved in the month-end close process can align and access what data directly from a single source of truth. While it’s unlikely that anyone will ever mistake closing the books for fun, it’s also true that the month-end close process doesn’t have to be the stuff of nightmares. The month-end close process is a dreaded routine for many finance departments. The process is tedious and time consuming—but it’s also crucial to ensure your company runs efficiently.

The Ins and Outs of the Accounts Payable Month-End Close Process

A human being is likely to make 10 errors in every 100 steps when performing redundant work. Accounting software can ease many of the difficulties of month end closing operations. Automation can help in consolidating all relevant data under a single platform, and help in classifying and organizing the data into fields that help in reconciliation and report generation. The accounts closing https://www.apzomedia.com/bookkeeping-startups-perfect-way-boost-financial-planning/ process is sometimes referred to as the “Record to Report (R2R)” process. Keep in mind, each business’s month-end accounting procedures can vary depending on the type of business, accounts, and accounting method. Automation software gives these teams awareness of financial activity throughout the firm, giving them a chance to provide input for purchasing decisions early on.

Even though internal records are not the same as an audited financial statement, they are still useful resources to third parties. In addition, having accurate and organized accounting records presents a picture to potential partners that the company takes its books seriously and has a strong handle on its finances. The same concept can be applied to companies and their financial performance. They use historical data, evaluate their current workforce, and create a yearly plan on how they will achieve these objectives. However, just like any trained runner, finance teams don’t just wait until the end of the year to measure their progress, they must track their success little by little to ensure they are right on track.