Shortening your close checklist can also help shorten your month-end close.
Many of us are about to start our first quarterly closes of the new fiscal year. Before the fun starts next week, consider taking some time to clean-up your accounting close checklist. Below are a couple good reasons for going through this exercise:
How do you go about trimming your close checklist? Below are some suggestions!
As an accounting technology advocate, I naturally point to software solutions first when asked about how month-end closes can be shortened. If your team is serious about closing the books in less than a week, for example, I can’t imagine GL Teams being able to accomplish this without these 3 solutions (non-revenue):
Automation is great, but there are other effective ways to improve your accounting organization's ability to close the books faster.
As an accounting technology advocate, when I'm asked to give advice on how to close the books faster my first answer is always "less spreadsheets, more software." Of course, applications like Gappify's Vendor Accrual Solution are critical in reducing manual accounting entries and eliminating errors (shameless plug out of the way early). But as your typical and practical accountant with hands-on experience running month-end closes, I fully understand that automation today can only take us so far.
With that in mind, Gappify is taking an active approach this year in sharing close-related tips/tricks we learn from our accounting community. We have several announcements soon about programs/platforms we've designed to equip fellow accountants with practical and hands-on guides/tools helpful running an efficient close. To hear about these updates, please follow us on our LinkedIn page located here.
For this very first post of 2017, I'd like to start by sharing my 4 P's for a Faster Accounting Close:
In our future blogs, we'll explore each area of accounting in greater detail to share specific and tips and tricks. For now, we hope that these 4 P's will serve as an effective reminder on how to set a strong foundation to running an efficient month-end accounting close.
In the last few months, I've been asked by several colleagues about improvements to their AP check disbursement process. My initial thought: in a year when we are seeing self-driving cars and talking about colonizing Mars, we're still mailing manual checks today? My answer: please stop.
Below are 3 reasons why AP should stop cutting checks, and 3 ways to eliminate the practice in your organization.
Why should AP stop issuing checks?
1. The time to manually print, put together approval packages, track down signatures, stuffing/mailing, etc. is time consuming. The overall time/cost of issuing checks is far more expensive than electronic funds transfers (EFTs). In fact, the cost of postage alone already exceeds the cost of an EFT transaction.
2. The accounting maintenance aspect of issuing checks also adds time to month-end close. For example, accounting has to ensure that checks printed are actually mailed by month-end (if not, a JE is required to add-back the cash to the GL). Also on bank recons, the outstanding check list must be reviewed – and in some cases older/stale checks may even need to go through the escheatment process.
3. Finally, vendors get paid faster with EFTs. This means less disruption to services for your business, and also less questions from vendors about payment status.
Here are 3 ways to end the practice of issuing manual checks:
1. For vendors that are currently being paid via check, reach out and ask them to provide EFT payment details. Most vendors accept EFT payments, and what I’ve noticed over the years is that the only reason why some vendors were being paid by check was simple: no one has ever asked them for their EFT payment info!
2. On your new vendor setup form, take out “check payment” as a payment option. Require them to provide you with bank information. Gappify plug: to demo our online vendor setup form solution (which includes online Form W-9’s and ERP integration), please visit: http://www.gappify.com/demorequestvs.html.
3. Lastly, if you have the option, avoid doing business with companies that only accept checks. I understand that there are many larger/old-fashioned vendors that still only accept checks today (because of established processes they do not yet want to disrupt). But for boutique vendors, if they are unable to provide bank account information it may be a sign that their business is not established enough to service your organization.
Ending the practice of issuing manual checks is a win-all proposition. Your AP team becomes more efficient, and vendors receive payments quicker.
Being an accounting service and software provider in the Silicon Valley, I'm fortunate to be in position to see new emerging trends as they happen. Make no mistake about it: one of the hottest month-end close topics today is the ownership of accruals (vendor estimated accruals, specifically).
Based on what I've been hearing from the industry, I've come up with 3 reasons why FP&A should do accruals (instead of AP or GL):
My FP&A friends will likely un-friend/un-follow for me taking it even a step further...but I believe FP&A should also post accrual JE themselves (after compiling/calculating the accrual). As a long-time SOX practitioner, there is no segregation of duties issues with allowing FP&A to create JEs (assuming they have no subledger/module access, and don't have the ability to approve their own JEs). Handing a JE for the GL team to post for FP&A is just another unnecessary touch-point in the process.
Don't worry FP&A friends, there is technology available out there (*ahem*) that can help. Gappify is amazing at automating the process of gathering vendor and budget owner data/estimates. For a demo, visit our page here :)
Welcome to April month-end close! Here are a couple quick tips from Gappify that will help your teams close your books faster:
San Francisco, Calif., March 10, 2016 - Gappify, an app store for corporate accountants, announced today the release of five new apps. The apps include: 302 Sub-Certification Confirmation, Related Party Transaction Questionnaire, Code of Conduct Confirmation, System User Access Review and Directors & Officers (D&O) Questionnaire.
"We're excited about this new release because we know SOX and accounting teams are frustrated with manual email approvals and spreadsheet logs", said Charlene Garland, COO and Co-Founder of Gappify. "Not only is this method inefficient, but external auditors (particularly the Big 4) are continuing to put pressure on management to improve internal controls and documentation. Gappify's suite of apps, including this new release, helps accountants generate better documentation for auditors.”
For a list of the new apps released by Gappify, go to www.gappify.com/soxconfirms.
Gappify eliminates routine accounting spreadsheets. More than 60% of a corporate accountant's day is spent on manual spreadsheet tasks. Gappify's app store contains various web-based tools that help accountants efficiently prepare, confirm, review and analyze transactions. Its apps span across all accounting functions, including accounts payable, accounts receivable, external reporting, payroll, revenue, tax and others. For more information, visit www.gappify.com.
Charlene Garland I 415-796-9574 I firstname.lastname@example.org
During my career I've experienced the joys (*cough*) of year-end close as both an external auditor, and as an internal member of accounting teams. As most of us embark on this year's journey, I wanted to share a couple quick tips for our community:
Above all, the best advice I can give is to keep a list of grievances during this hectic period. Obviously part of the reason why nights/weekends are necessary during the close is due to the quick turn-around time imposed externally. But I am of the belief that if we can identify and correct enough of these inefficiencies from our close, one day we'll be able to keep year-end work hours at a reasonable level. Gappify will start helping companies with that goal in 2016, and after your year-end close we would love to show more about how we can do that for your team as well :)
I get it. We accountants were born with spreadsheets, and our birth certificates already have Excel license keys printed on them. And yes, I get that Excel is great when you need to crank out non-routine stuff such as calculating/breaking-down the impact of complex audit adjustments that go back to prior periods. But spreadsheets for routine and repeatable tasks? I'd like to think there's a better way.
One gripe about "routine spreadsheets" is that the absence of automated workflows. Your accounting team, for example, distributes your PBC spreadsheet to dozens of team-members via email. Everyone does their thing, and now you need this big manual effort to figure out who was assigned what, who hasn't submitted their stuff, etc. This method is old school, and it stinks when you're under the gun trying to gather PBC's for your auditors before they start field-work.
More importantly, as an analytically-oriented accountant, it bugs me how much data we lose from all these routine spreadsheets we use. Think about your bonus accrual schedules. We whip up this massive spreadsheet to calculate our accruals each period - but because the data is stuck in la-la-land (i.e., nowhere), how can we easily calculate the accuracy of estimated accruals by period over the course of time? How can we track which departments have a bad habit of underestimating, how accurate C-level estimates are, etc.? Of course we can create another large spreadsheet to try to calculate this (by gathering data from each period's spreadsheets), but the effort in this wouldn't pass the cost/benefit test.
We built Gappify as a first step to eliminating routine spreadsheets. I may be biased, but I'd like to think that we accountants are valued more for our analytical skills and talents (versus just being spreadsheet elves). This is especially important in today's environment, where the volume of business/financial data being generated is exponentially increasing. Businesses will need us not only to efficiently capture all of this data, but also to help partner with them to better understand what this data means to the business. More on this later...