For many finance professionals, closing the books at the end of a financial period is synonymous with long days and late nights spent wading through journal entries and seemingly endless reconciliations.
It’s arguably one of least enjoyable aspects of the job, with its uncomfortable blend of boredom and stress: You’re faced with a rigid procession of mundane tasks that pile up at the end of the month or quarter, and they need to be carried out by a strict deadline and with a high degree of accuracy.
Let’s face it: few people become accountants in order to focus their time and attention on period closes. Most are more interested in the work that comes afterwards – analysing results, spotting trends, making plans, advising the business on how it might best achieve its high-growth ambitions.
For that reason, the priority for many finance teams when it comes to period close can be summed up in one word: speed.
For finance teams, a faster close means more time to spend on more valuable, satisfying work. And it means that executives elsewhere in the business get faster access to recent financial information, increasing responsiveness to market conditions.
At the same time, however, there is no room for accuracy to be sacrificed on the altar of speed. For this reason, smart finance teams now consider ‘continuous accounting’ to be best practice.
Continuous accounting aims to distribute the finance team’s workload evenly over an accounting period. The thinking is that, if tasks normally associated with period close – such as reconciliations – are embedded in day-to-day activities throughout the month or quarter, then there shouldn’t be a spike in jobs left to do as period end approaches and closing the books shouldn’t take so long.
Implemented well, continuous accounting can also result in real-time reporting and a finance function that marches in step with the wider business, in tune with the ups and downs it experiences. In a high-growth business, that’s an attractive proposition, because the link between opportunities and challenges and their financial impacts are more immediately visible to all. And appropriate, considered responses can be made faster.
A modern, cloud-based finance system has a big role to play in helping companies achieve the goal of continuous accounting. For a start, using the cloud means that finance team members can perform period-end tasks regularly, regardless of the time, time zone or their physical location, simply by jumping on a device with a web browser.
More importantly, a modern, cloud-based finance system that is real-time and part of a suite of applications across the business allows the organisation to automate many routine tasks that might otherwise tie up experienced, talented finance professionals. These include journal entries, account reconciliations, variance analysis and intercompany transactions, which are executed automatically throughout the month, in the cloud.
Finally, where human intervention is required, a cloud-based finance system can be configured not only to serve up period-end-related assignments to the most appropriate team members on a regular basis throughout the month, but also provide managers with dashboard-based views of how work is progressing and what might be left to do as period-end approaches.
In these ways, continuous accounting means less stress for the finance team, while at the same time providing the greater efficiency, higher accuracy and cleaner financial statements that a high-growth company needs to continue on an upwards trajectory. Learn more about NetSuite’s financial management.