The month end close is a busy and stressful time for any finance team. One of the key elements to maintain some order within this chaos is task or checklist management. It’s vital to ensure the hundreds of closing tasks are all completed successfully, on time and in the right sequence.
The problem is that most organizations still manage their close checklist in a very manual and inefficient way. This creates more stress and errors for those carrying out the tasks and has a negative impact on the accuracy and timeliness of closing the books and reporting group figures.
A major culprit is the humble Excel spreadsheet. Finance staff find comfort in its familiarity. It’s also relatively cheap and straightforward to use. A company will often have a single spreadsheet of 500 or so tasks with owners assigned to each of them. Process management comes down to literally marking them off when each is completed.
While this might seem to work on the surface, it’s really just duct tape over the problem. It’s very manual and risky. A spreadsheet is essentially just a piece of digital paper. It relies on time-pressured staff to remember to mark off tasks as they go so someone else can begin the next task in the chain.
Spreadsheets don’t give a global picture or audit trail of how the close is progressing. They can cause problems with tasks being marked incorrectly as complete. They don’t provide task automation capabilities, and they don’t support collaboration and communication between geographically dispersed teams.
Spreadsheets can’t manage task sequence and dependencies, either. For example, you can’t depreciate the assets in the asset register before you’ve completely updated the asset register with the new assets you’ve bought, sold or transferred to other companies. If you do run the depreciation before you’ve done all that, then the depreciation charge will be wrong because it’s based on an old view of the assets, which then requires more time and effort to correct.
Spreadsheets also don’t give you a full audit trail of who did what, when they did it, and what data is in the system to support what has been done. This means that you miss analytics around the process, and you can’t see whether tasks are progressing on time, or if there’s a control weakness in the process.
That’s why finance automation is essential to a faster and more accurate close. It gives you the visibility and transparency to see progress in real time and eliminates manual effort so you can focus on work that adds value.
Redwood’s close checklist management solution provides that visibility and transparency through a role-based dashboard. Whether you’re a person in a small team, the owner of a shared service center or the group CFO, you can see exactly what you need to see as it happens.
It’s also rule-driven, which is particularly important since the month end close is so often poorly documented. Often, the close checklist is a dark art, outlined by a vague task list in a spreadsheet with rules that only exist in one person’s head. In contrast, an automated rule-driven process works exactly as you’ve defined it 100% of the time and brings consistency by eradicating errors and spurious judgement calls.
Another key component of this kind of automation is that it orchestrates handoffs and handovers between humans and steps in automated tasks. This ensures a seamless process with all dependencies connected through a digital critical path. With Redwood’s close checklist management solution, you get a complete audit trail of all processes with supporting data and analytics to help identify bottlenecks and potential improvements.
Rule-based, coordinated finance automation makes the close a non-event. It takes workload and pressure away from the end of the month and makes them a part of the normal daily and weekly schedule.
Find out how to make your close a non-event with Redwood’s cloud-based financial close checklist automation