New research from Accountagility, a leading solutions provider for the finance function, has revealed that an incredible 94% of companies perform an early month end close to allow extra time to process errors in data.
Accountagility’s findings saw two thirds of businesses (66.5%) close their month end cycle two days early, with an additional quarter (25%) closing a day ahead in order to combat the challenges faced when processing such large amounts data each month.
Over half (53%) of the CFOs and FDs surveyed stated that manual adjustments were one of the biggest pain points faced at month end, with processing errors (44.5%) also a widespread complaint among respondents.
WANT TO BUILD A FINANCIAL EMPIRE?
Subscribe to the Global Banking & Finance Review Newsletter for FREE Get Access to Exclusive Reports to Save Time & Money
By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
According to Accountagility, when the month end cycle rolls around, issues are typically not spotted until a firm’s CFO examines the data output, which calls for manual adjustments to be made before the data is resubmitted into the cycle. The cause of the problem is most frequently a data issue in the general ledger or another financial system, but these can be time-consuming to correct if caused by a deeper underlying issue, and are therefore usually pushed back until the following month to be addressed.
Robert Gothan, CEO and Founder of Accountagility, comments:
“In reality, the monthly finance cycle should be viewed as a manufacturing process, with well-established techniques to improve the reliability and consistency of the finished product. For finance departments, this means looking at areas such as defect tracking, and most crucially, quality assurance which is necessary to reduce the risk of error. This represents a positive culture change which needs to happen in the finance function.
By implementing a more efficient month end regime, finance departments can spend less time adjusting errors, and more time focusing on the business’ objectives. Crucially, CFOs can be more confident in the team’s output each month and concentrate their attentions on the business insights to be gained from the information itself.”