The financial close is one of the most critical recurring processes for accounting departments. But it‘s also notoriously complex, tedious, and time-consuming.
As a financial automation expert with over 10 years optimizing record-to-report processes, I‘m passionate about helping accounting teams close faster and strategically.
In this post, I‘ll share the top 4 ways leading finance organizations are transforming their month-end close in 2024:
- Automating high-volume, repetitive tasks
- Implementing intelligent automation for reconciliations
- Building real-time dashboards for increased visibility
- Upskilling staff into data-driven advisors
Let‘s explore each area…
Automate Repetitive, Manual Processes
Finance teams slog through a tidal wave of manual processes to close each period. From ledger reconciliations to transaction matching, these repetitive activities sap productivity without adding value.
Robotic process automation (RPA) is revolutionizing how accounting departments handle high-volume, routine close tasks:
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82% of heads of finance said RPA improves compliance and control, per a Deloitte study of over 1,500 finance professionals.
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Leading organizations have been able to cut hours spent on manual processes by 65% through scaling RPA, according to McKinsey research.
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Simple bots can work 24/7 without fatigue, amplifying productivity beyond human constraints.
Based on my experience with thousands of automation deployments, here are 3 key ways RPA transforms the financial close:
1. Automated Data Collection
Bots excel at gathering data from multiple formats and systems, freeing staff from this mundane step. For example:
- Extracting accounts receivable data from billing systems
- Compiling inventory records from warehouses and retail outlets
- Downloading daily bank reports and transactions
Rather than log into 5+ systems and copy-paste data, bots handle the legwork seamlessly. Staff then have complete data for reconciliations and reporting.
2. Transaction Matching and Reconciliation
Matching invoices to payments and orders is mind-numbingly dull. RPA bots can zip through thousands of records to identify mismatches and exceptions for accountants to review.
Bots also reconcile transactions from subledgers to control accounts much faster than humanly possible. According to research by Aberdeen Group, leading finance teams using RPA improve subledger to GL account reconciliation by 19%.
3. Report Generation and Distribution
Manuals compiling reports in spreadsheets or slides is another drain on productivity. RPA can be configured to extract data, populate templates, and automatically email completed reports to stakeholders when needed.
For example, bots can generate daily sales flash reports, weekly budget-to-actual analyses, and monthly KPI presentations. Accountants define what‘s needed, and automation handles the repetitive creation and distribution.
While RPA knocks out repetitive tasks, AI solutions are emerging to automate more complex activities:
- Machine learning for automated journal entries
- Natural language processing to read and approve contracts
- Predictive analytics to forecast cash flow
Combining RPA, AI, and other technologies creates an intelligent automation fabric that transforms how financial closes are executed.
Implement Intelligent Reconciliation
Reconciling accounts manually steals time without improving quality. In fact, research shows accountants only sample 10-30% of transactions when reconciling manually, leaving gaps for errors.
Intelligent reconciliation solutions use automation and AI to reconcile 100% of transactions with higher accuracy:
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According to a study by Aberdeen Group, organizations using intelligent solutions reconcile accounts 90% faster than manual processes.
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72% fewer errors are identified compared to traditional reconciliation methods.
Here are 3 ways intelligent solutions modernize reconciliations:
1. Auto-Matching Transactions
Powerful algorithms match hundreds of attributes across transactions, documents, and master data to identify differences and exceptions. This replaces manual comparisons.
2. Root Cause Analysis
When exceptions arise, AI analyzes patterns across current and historical data to determine the likely root cause. Keyword searches provide context to research issues.
3. Continuous Optimization
The system learns how accountants handle different exception types and applies this intelligence to automate repetitive decisions in the future.
According to research by leading financial institutions, leveraging intelligent reconciliation can reduce time spent on reconciliations by up to 90%. This allows your team to focus on high-value exceptions and analysis rather than routine matching.
Build Real-Time Visibility with Dashboards
During hectic financial closes, accountants and executives need real-time visibility into status. Dashboards make this possible by connecting systems and displaying progress as it happens.
Here are 5 dashboard elements I‘d recommend based on lessons from past implementations:
1. Dynamic Close Task List
See all close tasks in one view. Filter by status – To Do, In Progress, Complete, etc. Click into any task to see details or reassign ownership.
2. Countdown Timer
A ticking countdown clock shows days hours, and minutes left until close deadline. Configurable warnings highlight missed milestones.
3. Key Metric Tracking
KPIs like percent of journal entries completed, first-pass reconciliation rates, and number of open issues provide an objective view of progress.
4. Root Cause Analysis
When roadblocks arise, log issues with timestamped details, assignees, and statuses. Spot bottlenecks early.
5. Real-Time Data Feeds
Pull and display live data from sources like ERP, CRM, and HCM systems to reflect close status, vs. static snapshots.
With these dashboards displayed across the department, everyone has full visibility to rally around deadlines. Management also gains objective data to continuously improve future closes.
Upskill Staff for Data-Driven Decision Making
As financial analytics and automation advance, accountants need new capabilities to drive business performance:
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Advanced data skills – Using SQL, Power BI, and AI to gain strategic insights from financial data.
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Visualization and storytelling – Transforming analyses into compelling charts, dashboards, and presentations to influence decisions.
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Process improvement – Applying Six Sigma and Lean principles to optimize efficiency, quality, and speed.
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Change management – Ensuring new technologies are successfully adopted through training and engagement.
According to Gartner, the #1 priority for CFOs in 2024 is “Enabling Finance with Data, Analytics and Business Insights." Upskilling staff into data-driven strategists helps achieve this goal.
I recommend establishing an automation Center of Excellence (CoE). This internal team masters new technologies like RPA and drives adoption across the broader organization through training, support, and sharing best practices.
The CoE helps the finance department embrace change at the pace demanded by the digital age. Staff are continuously retrained, redeployed, and re-energized through upskilling programs.
Today‘s leading organizations are unlocking strategic value from the financial close through automation, analytics, and new talent strategies. Accounting moves from rear-view number crunching to real-time decision support.
As a finance leader, follow the four best practices outlined above to streamline closes and transform your team. I welcome your thoughts and questions! Please reach out to discuss how to put these methods into action for your organization this year.