Continuously Close Your Books: The Next Version of Month-End Close
The month-end close process can be a daunting task, with long hours, stress, and a scramble to tie up all loose ends before the month officially closes. But what if we told you there’s a better way? A method that spreads the workload, reduces the last-minute hustle, and ensures a more streamlined process? Enter the concept of the continuous month-end close.
Traditional vs. Continuous Month-End Close
Traditionally, the month-end close is a reactive process. Teams wait until the month’s end to gather, process, and report on the financial data. This can lead to increased pressure, potential errors, and a rush against time.
On the other hand, the continuous close approach is proactive. Instead of waiting until the end of the month, tasks are distributed throughout the month. This smoothens the process and allows for real-time insights, better decision-making, and a more relaxed environment.
The Continuous Month-End Close Roadmap
Big credits to Josh, Your CFO Guys, on one proposed timeline:
This isn’t the only timeline; what may work best for your business would be to test and adjust where there are still open questions.
Days 11-15: Setting the Stage
Review Budgets vs. Actuals: This early review gives insights into variances, allowing for proactive adjustments.
Review Comparison against Prior Month: Spot any trends or anomalies that need attention.
Meet with CEO & Management: Foster communication and align on financial performance and expectations.
Prepare Reports: Early report preparation can help identify gaps and areas that need more detailed scrutiny.
Days 16-20: Addressing the Gaps
Respond to Any Ad Hoc Requests/Open Items: Address any unexpected requests or open items from management or other departments.
Regroup with Team on Learnings & Feedback: Continuous improvement is critical. Understand what’s working and what needs tweaking.
Follow-up on Action Items: Ensure all tasks identified in the first phase are on track.
Days 21-31: Transactional Heavy-Lifting
Import Transactions: Don’t wait; keep your books updated.
Classify Transactions by Category, Class, and Vendor: Proper classification ensures accurate reporting.
Upload and Process Bills from Vendors: Timely processing avoids payment delays.
Attach Receipts & Contracts: Keep everything organized and accessible.
Sync Transactions from Bank Feed: Ensure your books align with bank statements.
Import and Send Invoices to Customers: The sooner you invoice, the sooner you get paid.
Days 1-4: Wrapping Up Loose Ends
Import Remaining Transactions: Ensure nothing is missed.
Collect Outstanding Bills from Last Month: Stay on top of receivables.
Download Bank Statements: Ready for reconciliation.
Classify Remaining Transactions: Final push for accurate categorization.
Send Remaining Invoices from Last Month: Don’t let any revenue slip through.
Days 5-7: Laying the Foundation
Prepare Work Papers in Spreadsheets: Get all your data ready for finalization.
Book Adjusting Journal Entries: Ensure your books reflect accurate financial data.
Match Work Papers to Trial Balance: A crucial step for accuracy.
Days 8-10: The Final Review
Review Balance Sheet: Ensure all assets, liabilities, and equity are accurate.
Review P&L: Understand the month’s financial performance.
Review AP/AR Ledger: Stay on top of payables and receivables.
Finalized Review for Accuracy: Triple-check everything.
Publish Month-End Close: Celebrate a job well done!
The continuous month-end close approach is revolutionary. It transforms a traditionally stressful process into a smooth, efficient, and proactive one. You can enjoy real-time insights, more effective decision-making, and a more balanced workload by continuously closing your books. So, why wait until the end of the month when you can be ahead of the game?
At Turbine, we’re building an all-in-one platform for managing your supply chain, inventory, and accounting visibility. From accurate, timely landed costs, from procurement to delivery to customer’s door, if you’re ready to hit your next inflection point of growth, it’s time to consider Turbine. We’d love to chat. Book a demo or drop us a note at hello@helloturbine.com
