Your month-end process should be a breeze, not a monthly headache. Download the ebook to learn the steps you can take to automate your month-end process for a streamlined, stress-free experience.
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How stressed are accountants? A recent study by the Institute of Chartered Accountants in England and Wales found that 80% of accountants struggled with general stress, and 56% said they were on the verge of burnout.
There are many reasons why accounting professionals are feeling under pressure, but month-end accounting procedures certainly do not help.
When it's time to close the books and finalize the monthly general ledger, the finance department has a distinctly different atmosphere. A single data-entry error in the close process can make later transactions and payments difficult, if not impossible, to track. But, too often, there are so many tasks and steps to proper financial reporting in the month-end closing process that a few mistakes are guaranteed, not a probability.
And the smaller the accounting team, the larger the workload. There are just too many tasks to keep up with, from reconciling cash to posting journal entries and compiling reports. And if the functions are all manual processes, everyone will feel the tension in wrapping up the steps. The stress levels are through the roof as professionals painstakingly enter data into their ERP system one number at a time.
The month-end accounting process is extensive and requires completing several steps properly. For nearly 60% of companies, it takes a full seven days to complete the process. While it can take fewer days to close the monthly accounts, you risk making mistakes just to finish faster. When in doubt, work slowly and take breaks. Accurate accounts are far superior to rushed ones.
Typically, the accounting team needs to follow this checklist:
All of these are usually largely manual processes, including financial reporting. There is nothing worse than spending a Friday afternoon trying to correct and position graphs in Microsoft Excel without losing critical data. Even with an ERP, it can feel like jumping through hoops to compile the perfect month-end close report.
And this is assuming everyone knows what to do during closing. There are several challenges accounting teams face when successfully closing accounts for the month. Some common issues are:
Automation is the answer to reducing employee stress, easing the workload, and improving efficiency. And when it comes to the month-end close process, there are areas that can be automated. Here are just our top five:
A successful and timely monthly closing process makes it easy to see into cash flow for a specific business. Automated accounting software, especially for accounts receivable, is the first step towards a stress-free month-end accounting process. Automation is the fastest and most cost-efficient way to an accurate balance sheet month after month, from bank reconciliation to generating financial reports.
Automation is key to making all of these processes frictionless. And while we focus on AR processes, there are other exceptional providers to help you streamline each of these areas. Check out our complete e-book on reducing stress at month-end accounting for the whole story.