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2016 Best Practices On How To Close The Books Faster

All CFOs or finance managers or regular accountants who want to improve their pace of closing the books and those who want to improve the process of how they close the books will find this whitepaper useful. Download Now!

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2016 Best Practices On How To Close The Books Faster

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  1. 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER

  2. INTRODUCTION Faster and error-free closing of the books is one of the most important tasks for finance departments. This is because the analysis generated from this activity spans across several parts of the organization. It is and must be operational in nature for it to be worthy of the time investment. Being able to close the books fast means enabling the management to see in a timely manner what went wrong, what the team has succeeded in doing, and what else can be done to avoid future problems. It is all about being quick enough in adjusting the strategies employed. Faster closing of the books, undoubtedly, gives more time for everyone to do a deeper analysis of the business and more time to prepare for other reports. WHO CAN READ THIS WHITEPAPER All CFOs or finance managers or regular accountants who want to improve their pace of closing the books and those who want to improve the process of how they close the books will find this whitepaper useful. This whitepaper poses questions worth pondering for those in the finance department. It also includes best practices of how to best approach this process to help professionals like you increase efficiency in their line of work. BENEFITS FROM CLOSING THE BOOKS FASTER 1. Access to real-time and reliable information 2. Free a lot of hours spent in creating information 3. Utilization of your finance team´s time in doing more business impacting tasks 4. Lessens the stress level of the finance team 2 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER

  3. TABLE OF CONTENTS INTRODUCTION 2 ABOUT THIS WHITE PAPER 2 QUESTIONS TO ASK TO IMPROVE THE PACE AND PROCESS OF THE CLOSING 4 BEST PRACTICES IN CLOSING THE BOOKS 6 CONCLUSION 11 www.performancecanvas.com info@dspanel.com 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER 3

  4. QUESTIONS TO ASK TO IMPROVE THE PACE AND PROCESS OF THE CLOSING Ask yourself the question, why can´t I close the books faster? Closing of the books must start with an attitude of wanting to consistently improve. By answering this question, you can have a rundown of the issues that currently plague your processes. It is a good way to find out how well you manage certain aspects of the financial process such as reporting issues, data integrity issues, accounts receivable and accounts payable issues, and many others. By always asking this question, it is easier to see a trend over time on which areas of the process continue to delay the closing. Armed with this knowledge, you can look at that specific aspect of the process to try and improve it. Are my data consistent and reliable? The integrity of data is one of the most crucial aspects of closing the books. Several companies complain of delays due to lack of trust in the numbers that there is a need to retrace certain steps before they can move forward. Ensuring that data is clean and reliable must be one of the top priorities for improvement. Several financial management software such as Performance Canvas by DSPanel is tasked to ensure just that – achievement of consistent and reliable figures. Do I do a step by step documentation of my process for the next close? This question is important because it tries to suggest a helpful step of documenting. By doing this, it becomes easier to track the aspects of the process that usually cause problems. As the process gets repeated, there is continuous learning that might ultimately lead you to reorder the steps in a more efficient manner, maybe simplify some of the other steps, or even totally remove unnecessary steps. 4 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER

  5. Is my intracompany eliminations and workflow automated? There is a strong correlation between automation and the number of days it takes to close the books. By automating your intracompany eliminations and other processes, significant time is saved. Several companies understand that automation is important but the biggest problem still lies in the fact that only a certain portion of the process is automated. The rest are still manually done. Manual work leads to unnecessary time spent and higher likelihood of errors which can again add to further delays. Am I delayed due to spreadsheet errors? Despite the known problems associated with spreadsheets, it cannot be denied that the response of many companies in moving away from spreadsheets has been slower than expected. Spreadsheets are still deeply entrenched in business processes. The major problem with this is that there is a huge number of errors that can lead to a lot of frustration and unnecessary delay. This should be easily addressed by choosing a software to aid your organization in trying to move away from complex spreadsheets as fast and as efficient as possible. Have I adopted a new financial management software? Around closing of the books time, CFOs and Finance managers need very little convincing in adopting a new financial management software – both for reporting and budgeting as well as consolidating. This is because the pains of closing are still fresh in their minds. However, as the search for the right technology begins, they realize it is a vast ocean out there with several fishing boats claiming more or less the same thing. It is such a big decision that it requires a lot of time for you to look into the most appropriate solution. This is completely logical and understandable but it is important that you keep in mind that you need technology if you want to be agile. What has always worked in the past does not necessary mean it is the only way forward. It is also important to remember that you do not need to adjust your entire process to accommodate the software. The software must adjust to ensure it meets your unique business needs. 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER 5

  6. BEST PRACTICES IN CLOSING THE BOOKS To be able to effect a faster close, we need to look at the significant and structural reduction in specific timelines, you should look at the entirety of the financial data available including processes such as how transactions are created, how you deal with repetitive tasks, and how your ERP software or any tool you choose for that matter handles your data. Don´t use Spreadsheets A surprisingly high number of organizations still use spreadsheets today and it is not a sustainable and ideal way to do it. You can ask any other CFO running a midsized to large company to see if they are happy doing spreadsheets and the answer will be a resounding NO. Spreadsheets will only lead to more time fixing errors, broken macros, rechecking numbers. Over the years, the spreadsheet problem will only get worse that it is better to invest in technology that can aid you in closing the books faster and in a more error- free manner. Automate, automate, and automate It is a known fact that there is a huge correlation between automation and faster closing of the books. This process is so tedious and it requires a lot of man hours that it most often defeats the purpose of closing the books – which is to have access to real time performance information. Today, automation is the only way forward. You need to be able to automate your month-end transactions, recurring entries, or the process of consolidation. Several best in class companies today enjoy effective automation for Intercompany eliminations, variance analysis, warranty and debts calculation, recurring journal entries, allocation and consolidation. 6 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER

  7. Allocate your Resources strategically They don´t tell you in accounting schools that most of your time will actually be spent obtaining information from operations. By allocating your resources properly and distributing the responsibilities clearly, you can transcend your finance personnel from just being collectors and calculators of information to reviewers of information. Create a Check list There are so many things that go into closing the books that it is easy to lose track of them. It is ideal to have a checklist for each of your closing activities and include in it a timeline. By doing this, you not only have better control of everything you can also easily spot areas for improvement such as which activities can be done ahead of time to minimize too much workload towards closing? What activities can the team do without? Or you get to develop a battle plan as well for the next time you close the books based on the learnings you gained from the last one. 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER 7

  8. Simplify your Charter of Accounts It is a great practice to look at your chart of accounts and get them reviewed and cleaned out at least once a year. The problem here is that over the years, your accounts tend to build up and it becomes too complex to use for certain transactions. Define your General ledger clearly and know exactly which purpose it serves. Standardizing this across your company can make a huge difference in your pace and process. Get the process in place for automatic posting of accounting entries Subsidiary ledgers and general ledgers as accounting entries are immediately posted. Other areas where this can be applied are in Accounts Receivables, Accounts Payables, Payroll, fixed assets, etc. By doing this, you reduce the time spent for posting these entries and at the same time you prevent the possibility of creating errors. Do a pre-close meeting Do a “pre-close meeting” early in the close cycle. This is useful so that you can discuss any unusual results with management and any potential issues that could impede the close 8 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER

  9. Inject Estimation techniques Incorporate estimation techniques in non-quarter month-end closes. Over time, you will start to see trends that it can be easier for you to estimate which will help in making sure you get to close faster. Close active accounts and cost centers on a timely basis Today, closing active accounts and cost centers are not closed on a timely basis (at least for a lot of organizations). They get caught up with so many other things they need to do that this is usually not done in a timely manner anymore. Use Key Performance Indicators Key performance indicators can be very useful. Use KPIs that measures quality, cycle time, and cost to help you get a better view of things. 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER 9

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  11. CONCLUSION Ultimately, you have to remember that the purpose of closing is for it to lead you to higher quality and more accurate reporting. What good will a fast close do if a lot of your numbers do not accurately reflect the current state of the business? A disciplined and timely close is even more important in this economic climate. By achieving a faster and more reliable close through optimized and well managed process, the finance team is able to do what it is supposed to do best – be a strategic partner to the organization. 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER 11

  12. TOP BUDGETING AND PLANNING SOFTWARE 2016 Performance Canvas by DSPanel Anaplan Epicor Financial Planner Tagetik SAP BPC IBM Whitebirch Planning True Sky TCM by TCM Infosys Castaway Gide Financial Modelling Suite Hubble Vena Solutions Board International Centage Big Boss by DSE Group Prophix Budgeting Entry by Isidore Oracle Planning and Budgeting Calumo Longview Platform PowerPlan 12 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER

  13. About Performance Canvas by DSPanel With Performance Canvas we deliver Financial Reporting, Planning, Budgeting, Performance Management and Consolidation in a way that will put your business into overdrive. Based on the ease-of-use of Microsoft Excel and the full power of Microsoft SQL Server we deliver Finance and Performance Management complementing your selected combination of ERP and Line-of-Business systems. Your Finance & Management teams will increase agility, productivity and efficiency within minutes using pcFinancials, pcMobile and pcLegal products powered by DSPanel. The experts behind all Performance Canvas products are the very same experts who designed Hyperion Enterprise, IBM Cognos and Consolidator (frango and IBM), SAP BPC, and Clarity System. Performance Canvas was built from the ground up to answer the unarticulated needs of the market not addressed by previous available solutions. www.performancecanvas.com info@dspanel.com 2016 BEST PRACTICES ON HOW TO CLOSE THE BOOKS FASTER 13

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