Month-end stress in businesses can be real, especially for financing and accounting teams. When it comes to closing the books while getting all the data accurate, it can be tiring and labor-intensive for the team to work through all of it for long hours.
Month-end accounting is a crucial process for every financial team in the business, and it happens at the end of the fiscal month.
Let's discuss more this process and how one solution can eliminate all the time-consuming and tedious work, making it stress-free for them!
What is month-end accounting?
What are the challenges faced during month-end accounting?
How can automation help improve your month-end accounting?
Month-end accounting or month-end close is a process taken to review all the financial and accounting data of the previous month and ensure all the books are closed.
It helps to keep a track of all the financial transactions taking place during the month, as well as keep the data accurate, organized and complete. This will also help you increase efficiency and streamline other accounting audits, especially making it easier for year-end close.
The month-end closing process helps you identify the loopholes and gather insights on how you can solve them for the next month. It gives visibility into data and helps take informed decisions for better financial planning.
Most accounting and financing teams rely on manual tools like spreadsheets and documents to compile the data.
With the massive amount of data needed to enter on spreadsheets, it can become confusing and inefficient since spreadsheets weren't built for all this complex data, in the first place.
This can result in errors, paving the way for inaccuracy in the month-end accounting process. It can start as small errors that go unnoticed and later when everything is compiled, turn into inaccurate data. It will be more difficult to track these errors in the network of data, having to spend a lot of time trying to find them and correct them.
In a month-end closing procedure, it is crucial to have good visibility into all the data and audits. But when there are manual tools involved such as spreadsheets, there will be limited visibility as it is difficult to gather insights and analytics.
This, in turn, makes it difficult for the team to perform in-depth audits for financial planning as well as results in poor decision-making.
With technology and innovation taking over, automation seems like an ideal solution to speed up and efficiently perform the month-end accounting process. Once automation software is set up, all needed is a few clicks here and there and the software takes care of the process.
By reducing manual work and setting up automation in place of highly repetitive tasks, you can streamline the month-end close procedure. It saves a lot of time for the team, allowing them to focus and improve on other strategic tasks and audits.
Automation can also help improve control and security over risks and errors, leading to fewer to no errors. This can bring well-organized data, accurate and complete, enabling the team to audit efficiently without worrying about errors and having to correct them in the middle of the process.
Month-end close automation provides access to increased visibility and transparency, empowering the team with detailed insights and real-time analytics, for better decision-making and financial planning and reporting.
In the month-end close process, one important area that can be automated is accounts receivable management. Accounts receivable refers to the payments owed by the customers to the business for the purchases made on credit. By automating workflows, reminders, and invoicing, the team can save a lot of time and resources on these repetitive and mundane tasks.
Accounts receivable automation can also improve visibility into data, helping to identify delinquent accounts as well as gather insights into the customers' credit health and top debtors of the business. This can help to implement effective collection strategies, reduce DSO and recover debts, times before the end of the month.
An efficient and streamlined accounts receivable management can also bring in good cash flow for the business. Thus, it's important to automate the accounts receivable process in order to have stress-free month-end accounting, so that you don't have to worry about unrecoverable debts and not being able to close the books.
Maxyfi, an accounts receivable automation software, can help you get started easily.
Automate your AR process with Maxyfi and see how easy it's to do your month-end close!
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