In many businesses there's a seemingly constant struggle to reconcile financial results at the end of each period. This is an annual problem at the very least, but more often than not the difficulties experienced in the year-end close and reporting cycle are often perpetuated by constrained and complex monthly and quarterly closings.

The year-end close process can take weeks - sometimes even months. It's become a massive burden for CFOs and their teams who would rather be doing anything else. Every day they have to spend agonising over adjustments and eliminations is another day they can't spend thinking about big-picture ways to improve the business.

There has to be a better way. And indeed, there is. Rather than scrambling at the end of the year to reconcile systems and GL's across entities why not reform the process to get it right every month. This way, the year-end close process will fall smoothly into place, with fewer surprises, because it's already planned well in advance.

Overcoming the vicious cycle

The biggest problem with the year-end reporting process is that it's a vicious cycle - it has a way of repeating itself, year after year. From the collection and consolidation of financial results, to the creation of year-end financial statements, to audits and regulatory filings - finance teams are often distraught throughout the process. If you struggled to close the books easily in 2016 and did little to fix the problem long-term, you're likely to have the same issues again in 2017, '18 and beyond.

This is because the reporting process is like a nesting doll - there are layers of sub processes within main processes.  It starts with the collection of financial results from multiple systems, divisions and subsidiaries with each having their own chart of accounts and business practices. These results then require consolidation, and if the business operates within different geographies, then there's the additional complexity of multiple currency conversions, intercompany reconciliations and accounting for minority interests. Period-end account reconciliations themselves can run into hundreds and thousands and there are typically many changes and adjustments required before the CFO is ready to sign off on the financial results.

Relying on unwieldy financial reporting software or multiple spreadsheets and emails to handle year-end close, is a flimsy, error-prone approach that's unlikely to lead to long-term efficiency.

Automating and accelerating financial close

There are a number of reasons why organisations should speed up the financial close. Careful review and optimising of the monthly and quarterly processes can be key to mitigating an extended year-end close cycle. If account reconciliations such as intercompany reconciliations are attended to earlier on a monthly basis, out-of-balance issues can be resolved each month rather than plugging the difference and moving the issue out to year end.  This will make the year end close process much smoother. It's also crucial to automate as many financial processes as possible, which is another reason, Excel has no place in the financial close.  This will reduce the chance of errors and increase the speed of the financial close.