Learn how to optimize your financial close process with automation in 2023. Discover the benefits and best practices for a streamlined approach.
Fremont, CA: After a fiscal period, the financial closure involves modifying and closing financial records. The procedure, however, could be slowed down by many challenges along the road, such as the closure checklist's extensive duration, complicated regulatory requirements, and handling data from multiple systems.
Financial closing software options can effectively automate the execution & completion of this checklist with little to no human involvement. As a result, accountants will be able to concentrate on current, more relevant issues.
The steps in a financial closure checklist, including but not limited to Financial close automation software, assist in automating these procedures.
Automating journal entry
One of the primary tasks involved in the period-end closure is journal entry. It is alleged that over fifty percent of completed jobs are journal-related, primarily due to the thorough checking that must be done to ensure the accuracy of the entries. With each additional data source added, the process becomes more challenging and requires greater concentration. One advantage of a software program is that it precisely and automatically inputs data from various ERP and business systems into a journal.
Coordinating intercompany tasks
Complexities may result from the amount of data that is shared between companies, or that is dispersed throughout several business units. The rationale is that intercompany computation is a collaborative process that necessitates complete visibility of each party's balances, discrepancies, and underlying transactions for all parties involved.
For instance, issues like foreign exchange discrepancies, timing hiccups, and various business finance systems can result in a chaotic and complex back and forth as the season approaches. These are difficult to resolve and take a lot of time, which risks the timely bookkeeping closure and reconciliation.
Automated software programs can separate mismatched goods, match uncleared transactions from the appropriate counterparties, and inform designated parties of preventative remedies. Additionally, the program automatically detects documents about intercompany transactions and inserts them through the counterparty records.
Eliminating balance sheet inefficiencies
Balance sheet reconciliation, or balancing the debit against the credit, can be tricky since it necessitates error-free data extraction from several dispersed systems and human data entry into a spreadsheet. By automating the procedure, a single cloud-based repository would be created, where every piece of data would be accurately, successfully, and effortlessly integrated into the program, viewable to all involved staff.
Additionally, automating the certification of balance sheets improves the accuracy of the data, saves time by removing tedious human activities, and may lower audit costs. To have a single source of truth, automated systems can maintain data warehouses to look for data abnormalities or duplication.
