15 March 2022
Top tips for quicker accounting processes
After a hectic couple of years, the finance department deserves some easy wins: things like fewer hours wasted on manual data entry, less time chasing up information, and a lower chance of error.
To help you get there, here are our essential tips for creating hassle-free processes and a quicker accounting cycle.
1. Break down the process
Your ultimate goal is a more efficient accounting process; one that takes up less time and fewer departmental resources, and one that (hopefully) results in less stress for employees as the period close draws nearer.
So where do you start? A useful way is to break down the process into its constituent parts.
Isolate all of the various tasks that make up your organisation’s current process; everything from collating transactions, depreciation calculations on fixed assets, intra-group profit elimination through to final sign-off. Establish who does what, when, in what order, what each task entails and how long it takes.
This can help you in a couple of ways. It enables you to identify those specific areas that are eating up your time and resources, so you have a better idea of where to focus your process optimisation efforts. Also, if you are considering updating your accounting and corporate performance management (CPM) software, you need to know where your specific accounting pain points reside to help you make the right choice.
2. Take a fresh look at your task sequences
In some areas, the commencement of one task will always be dependent on the completion of another (for example, obviously you cannot close accounts payable if you are still waiting for confirmation of costs incurred from the relevant stakeholder).
However, is there any particular reason why, for instance, Fixed Assets is always one of the last accounts to be closed each month?
Especially in mature organisations, a particular ordering of tasks can emerge over time. Sometimes, the initial reasoning behind this has long since gone, leaving you with a workflow that exists purely because that’s the way it has always been done.
It pays to take a fresh look at sequencing. If there’s no business reason why you shouldn’t be able to get a particular job done well in advance of the period-end, then re-sequence it for earlier completion.
3. Ditch spreadsheet inefficiencies, without necessarily losing the familiarity of Excel
Spreadsheet usage is often one of the biggest barriers to quicker accounting cycles.
Team members attempting to work together through Excel can easily become tied up with versioning queries. There’s a constant risk of input or formula errors; not to mention all those hours wasted on entering the same data in multiple documents.
On the flipside, team members are familiar with Excel - and any attempts to update legacy systems are met with considerable pushback.
If this sounds familiar, it’s worth looking closely at Corporate Performance Management (CPM) tools that offer an Excel add-on. Users get to interact with the system via a familiar Excel-based interface, but you are protected from all the negatives, including data duplication, versioning errors and inaccurate numbers.
4. Establish hard deadlines
Waiting for transactional and performance information from other departments can mean lots of dead time. Often, it can involve entering provisional figures into reports, and having to revisit them later for adjustments once the relevant information has been fed through.
In some cases, this is unavoidable. Often, however, it’s a case of the relevant stakeholders simply failing to submit their details in a timely manner.
You can help avoid this by setting deadlines for when expenses must be submitted. Explain why these deadlines are important - and - where necessary - co-opt HR to help ensure those deadlines are adhered to.
5. Better still, remove the need for manual submissions
Employee claims are often some of the most difficult categories of expense to manage. Finance department employees can find themselves having to spend an inordinate amount of time administering large volumes of receipts relating to relatively low amounts.
Travel and mileage is a case in point. And with Covid travel restrictions now largely behind us, it’s definitely worth looking at ways to process them more efficiently. For instance, iTrent, MHR’s integrated HR and payroll system, incorporates a dedicated mileage claim management tool. It eliminates the need for manual paperwork submissions; all calculations are done automatically, so it’s vastly quicker and much more accurate.
6. Integrated systems
If different branch offices and departments have siloed systems in play, how quickly you can act will always depend on different areas of the business feeding data through to you. Data from different systems has to be lifted and shifted, sometimes reformatted, checked and double checked…
If you want to make things quicker, data integration is crucial. This does not mean that you need to jettison the existing systems in play across the business (e.g. CRM and logistics management tools). However, you should focus your attention on a single platform capable of pulling together data from all areas of the business.
In this way, you always have access to all the up-to-date granular information you need. You can use this single trusted source of data for all financial processes from local close and group consolidation, through to regulatory reporting and disclosure.
7. Targeted automation
You will almost certainly have some elements of automation in place already. However, rather than a one-off exercise, it’s worth thinking about process optimisation as a series of questions that should be asked on a regular basis.
- Where, exactly, are our process bottlenecks occurring?
- What tasks take up most of the department’s time?
- What options are available for automating those tasks?
- Can our existing processes and technologies keep up with business growth?
- What reporting and regulatory challenges are around the corner, and will existing systems be able to meet them?
By asking these questions, you can help ensure that any new processes and technologies you implement are targeted at your specific business challenges.
Find out more
From transactional processing to overcoming specific compliance challenges, MHR and Microsoft Dynamics 365 specialises in helping organisations streamline their processes to free up valuable resources. To see what’s possible, click the link below.