Real-time insights: The hidden benefit of automated financial close
The financial close process is an important process for every organization as it ensures financial reporting accuracy. However, carrying it out with traditional spreadsheets often leads to errors and may even delay the entire process. This makes it difficult for accounting teams to meet deadlines or generate accurate reports.
This is where financial close software comes into the picture, helping organizations with real-time insights to streamline the entire financial close process. It further enhances efficiency by generating up-to-date financial reports that support better decision-making.
Automation accelerates the entire close process
Organizations face a lot of obstacles when it comes to the process of closing their books. One such obstacle is the fact that it takes considerable time to close owing to month-end chaos, which further leads to delayed reporting and inefficient decision-making. This is how automation can help organizations reduce the time they take to close their books:
Streamlining the entire workflow
Traditional methods for financial close involve using spreadsheets to manually enter journal entries and reconcile transactions. These steps are very tedious and are prone to human error.
Financial close automation software can help organizations to automate these manual and tedious tasks and reduce the time required to close their books. Thus, streamlining their entire workflow.
Detecting and resolving errors faster than ever
Manually closing books often delays the entire process as errors are usually only detected after recording the journal entries. This slows down the financial close process significantly as organizations have to wait till the end of the financial close process to detect these errors to resolve them.
However, automated financial close software can help organizations overcome the same by providing real-time error detection and flagging them as they arise. This enables organizations to proactively identify errors and resolve them.
Automated close improves data accuracy and compliance
Being able to maintain accurate financial records and meet regulatory requirements is crucial for organizations, especially if they are still using spreadsheets to do the same. This is how automation can help businesses stay compliant with the regulatory laws and eliminate errors:
Maintaining compliance with local regulatory laws
Manually closing the books may lead to errors that compromise the accuracy of the financial records, leading to non-compliance with the regulatory laws. Non compliance often results in organizations suffering huge penalties as well as impacts the organizations credibility.
Automated financial close software eliminates the possibility of such errors by making sure that data is being processed accurately across all accounts, ensuring compliance with regulations.
Being able to generate audit-ready documents
It is very difficult to maintain audit trails through spreadsheets and maintain records of edits made by the internal or external team working on these sheets for the financial close process. Not being able to maintain proper records for the same can lead to confusion and delay the process even more.
Advanced financial close software provides audit trails by documenting each and every action taken by every accountant working on the financial close process. This makes it very easy to later review these reports, making compliance edits faster and less stressful.
Maintaining standard financial close procedures across all subsidiaries
For large organizations with several subsidiaries, maintaining consistent financial records is quite difficult due to the challenges posed by intercompany accounting. This can make the entire process of consolidating these reports quite complex and error-prone.
However, financial close software can help standardize the intercompany accounting processes via consistent workflows and templates. This will ensure data is being recorded accurately and uniformly in the books, across all the branches of the organization.
Automated close provides enhanced visibility of the entire process with its real-time insights
Without access to real-time insights, there is no way for an organization to make proper data-driven decisions and have an ongoing status of the financial close process, this can be resolved with the help of automation by:
Being able to access dynamic dashboards
Financial close software enables the organization to take advantage of the real-time insights provided through its dynamic dashboards. These dashboards provide insights regarding the current status of the close activities, such as which accountant is working on updating the journal entries, the number of accounts being reconciled, un-reconciled accounts, etc.
Making proactive decisions
Having access to real-time data through a financial close software’s dashboards can also help organizations detect trends and anomalies early on in the process. For instance, if a sudden spike in expense is detected during the process of financial close, management can investigate it and resolve it immediately. This would have been impossible to do if they were still using a traditional method to close their books.
Conclusion
By automating the financial close process, organizations can make better decisions and empower themselves with real-time insights to gain an edge over their competitors. While the initial investment in a financial close software may seem expensive, it will outweigh the cost in the long run with its benefits, such as increased efficiency, better visibility of the process, reduced risks for non-compliance, etc.