Are multiple entities, geographies and systems creating havoc for period-end closing?

Period-end closing may be enough to grumble about as it is. According to the Adra Match Market Survey in 2013, 61% of accounting professionals are unhappy with their financial close processes. But, closing the books can be made even more complicated when your business encompasses multiple entities, geographies, and systems.

Entities

When your business has multiple entities, your period-end close requires consolidation. Consolidation can be frustrating and time-consuming, unless you’re using software that automates the process. Flexi’s Multiple Entity Financial Management provides automated consolidations and enterprise-wide insight, making your close more efficient and more easily managed.

Geographies

If your entities operate in various geographies, this can also complicate your close. Various states have different sales tax rates, and if your business is international, you’re working in a variety of currencies as well. Fortunately, Flexi’s Multiple Entity Financial Management easily manages various currencies to save you time and keep your data accurate.

Systems

When you are compiling data from a variety of sources, it’s easy to make manual errors when formatting the inconsistent data you’re gathering. To close, you need good systems that communicate well together, and error-prone technology like Microsoft Excel doesn’t cut it when you need timely, accurate data. Using cloud-based consolidation software like Flexi can help ensure that everyone in your organization is always accessing the most current, most accurate data.

Best Practices

To ease the burden your entities, geographies, and systems cause on your period-end close, consider investing in software that does the tough work for you.

Reconciliation software can align data from multiple sources, making the various systems you use more easily managed. When data format is inconsistent across systems, it can take a great deal of your staff’s time to reconcile. Let a smartly-designed software solution do that for you.

Additionally, software specific to managing your various entities, like Flexi’s Multiple Entity Financial Management, can help manage various currencies, tax rates, and locations.

Lastly, cloud-based software is a necessity in today’s accounting world for reliable, accurate, current data that is shared organization-wide. Too often departments operate in silos where they collect and analyze their own data in their own systems. By creating a centralized hub for all to access 24/7, data is always current, and all stakeholders always have access to the same numbers.

Flexi can help

Choosing software that helps ease the pain points of caused by your business’s entities, geographies, and systems is one step towards obtaining more manageable period closes. The full suite of Flexi products aims to streamline accounting processes, saving you time closing the books so your ever-busy team can move on to the next big task. Flexi products are cloud-based, non-proprietary, and compatible with Microsoft standards.

Are you feeling the pressures to close faster?

The pressure to close the books as fast as possible is higher than ever.

According to Adra Match, 90% of survey respondents said they feel they are under pressure to close faster, while only 39% are satisfied with the quality of their closing process and only 28% trust the numbers reported at their month-end closes. Another survey showed that less than 75% of survey respondents were able to close their books in six business days or less.

So what can be done to shorten the closing period? Who benefits from a shorter close?

Best practices for a faster close

If you’re feeling the pressure to close faster, there are a few best practices worth looking into.

Don’t wait to gather data

Don’t wait until the last minute to do every aspect of your closing. By asking departments outside of accounting to provide data throughout the month, and by spending incremental time doing daily or weekly closes, much of the data you need will already be ready to go by the end of the month–allowing you to close faster, and more accurately.

Save time by evaluating closing needs

Not all statements need to be closed on a monthly basis. Maybe some aspects of your close only need to be accounted for quarterly. Analyze your business needs and make informed decisions about what can wait to be closed to help save you time in the long run.

Use specialized software

Closing the books requires several accounting tasks that are time-consuming and tedious. With the help of the right software, much of these processes can be automated. For repetitive tasks that are repeated on a daily, weekly, or monthly basis, set parameters to run the required reports automatically to avoid spending time rebuilding and rerunning the data required.

Flip to future projections

Instead of analyzing the period after it happens, try projection and estimation. By forecasting, projections and estimates will become more accurate over time, allowing your business more credibility, deeper analysis, and better traction.

The case against a faster close

While pressure is on for faster closes, keep in mind that if closing faster jeopardizes the accuracy of your numbers, then it pays to slow down and solidify your data. CEB data shows that the average close has dropped from nine days to six. And, in the past few years, 90% of finance departments have included “shortening the accounting close” in their top priorities. In fact, CEB research suggests that top-performing accounting teams that provide better decision support tend to close slower.

The bottom line

If the pressure is on to close quickly, see if the above best practices can be implemented by your staff, but bear in mind that speed isn’t everything–accuracy is the number one concern of any organization’s accounting team.

How CPM & Financial Reporting Go Hand in Hand

Financial leaders know the importance of accurate data, and as technology improves, so do the processes for obtaining and analyzing that data.

The financial industry is increasingly embracing an enterprise-wide approach to Corporate Performance Management (CPM). Financial reporting provides insight into the financial health of the organization, but CPM takes an even deeper dive, allowing organizational leaders a broader opportunity for analysis and stronger decision-making. And, by sharing this data with leaders of the organization outside of the finance department, stronger, more informed decisions can be made among the executive team.

What is CPM?

CPM is an area of Business Intelligence (BI) that takes a comprehensive look at organizational performance, including (but not limited) to financial performance. CPM monitors and manages organizational performance according to detailed forecasting and comparisons, allowing organizational leaders foresight into pipelines, analysis, and even customer or member satisfaction.

CPM is widely used enterprise-wide and includes budgeting, forecasting, dashboarding, and scorecards. The push for transparency in organizational performance and organizational goals serves the corporate landscape as decisions can be made cross-departmentally with all department leaders. This can facilitate better, stronger decisions while keeping all organizational leaders apprised of the current data, performance, planning, and forecasting.

Along with organizational performance, CPM software allows stakeholders to draw comparisons to the performance of peers and competitor organizations. However, quality data is of the utmost importance in order for accurate projections and comparisons. Financial reporting is traditionally Excel-reliant, but extremely complex processes like budgeting, forecasting, and consolidation, are best handled by CPM software due to the lower probability for manual errors. Data quality tends to be higher in CPM systems as opposed to spreadsheets, which have been historically prone to manual errors.

A single repository for data to be housed is considered a best practice in the industry, as it ensures accuracy and validity of data.

Is Projecting Cash Flow a Challenge?

Projecting cash flow is a difficult task for any treasurer. While there are a series of known costs that are considered predictable (including wages, salaries, taxes, and debts), there are also two large components of every business that are very difficult to predict, making cash flow projections extremely challenging: accounts payable and accounts receivable.

The challenge

According to a Kyriba survey, more than 70% of treasury executives involved in cash flow projections report that the tasks involved account for up to half of their time. And, 43% percent of treasurers see a lack of visibility into both current and forecasted cash flow as one of their three biggest risk factors.

With so many treasurers spending so much of their time on cash flow projections and being unsatisfied with the results, it begs the question: what are the major challenges preventing accurate cash flow projections?

Accounts payable

Though accounts payable may seem straightforward, A/P can actually be quite a challenge to predict. The A/P manager likely has a list of suppliers with known costs, however, due to delayed authorization processes within the organization or a delayed invoice from the supplier, it can be incredibly difficult to accurately project. Flexi offers a tool that to streamline accounts payable.

Accounts receivable

Simply put, customers do not always pay on time, making accounts receivable very difficult to predict. Customers may pay late, or even pay early, both of which have a major effect on estimated projections. While collectors may know which customers tend to provide late payments, this information is rarely quantified.

Managing cash flow projections

Like many accounting tasks, it should not be surprising that many finance professionals have relied on Microsoft Excel to manage their cash flow projections over the years. But, as there is always the chance of error in a manual formula-based solution like Excel, additional projection tools have been added to the market in recent years.

Suppliers of cash flow projection software caution against the use of solutions like Excel due to the amount of manipulation and oversight required to manage them. With cash flow projection software, data is gathered, stored, and compared in a secure and stable environment.

In addition to equipping staff with the proper software, organizations should also be providing adequate training.

The future of cash flow projections

While it may be difficult, it is not impossible to obtain more accurate cash flow projections. This information is increasingly important for decision makers and cloud-based software companies like Flexi make it easy to access accurate data.

Is the lack of workflow hindering your ability for an accurate and fast period-end close?

If your business doesn’t follow a period-end close workflow, you could be throwing money out the window. Establishing a workflow not only delineates the processes for all parties involved, but it also presents a written record of that process, making it open for future improvements that might speed up the close or further ensure the data’s accuracy.

Period-end closing involves:

  • Data collection
  • Data scrubbing
  • Reconciliation
  • Validation
  • Report generation
  • Report review

The involved parties include the various individual lines of business, staff accountants, financial analysts, and finance team members.

The importance of a period-end workflow

The goal of all organizations is to produce timely and accurate financial statements within a reasonable period of time after the period-end close. These financial statements are critical to decision makers as they help to understand the health of the organization prior to making financial decisions.

Broken business processes suck time and money from an organization. Time and resources lost managing broken processes does not need to be considered “the cost of doing business.”

By following a workflow to close the books, your team can accomplish your close as quickly as possible, ensuring that the data provided to your decision makers is always the most accurate.

Best Practices

Incorporate procedures into daily operations

Whenever possible, incorporate as many of your period-end close needs into your daily operations. Doing this work ahead of time will help the speed and organization of your close immeasurably.

Work closely with other departments

If it makes sense to obtain data from other departments, set that into action in your workflow. If the requirement for this information is written into the workflow, you can depend on quality data in a timely manner, freeing up your accounting team to accomplish other accounting tasks.

Be open to improvements

Your workflow might not start out as the quickest or the most accurate. That’s okay. By writing a workflow, you are able to revisit, revise, and readjust as often as necessary until your process is ironclad.

Don’t forget the software

Flexi has a full suite of products that can help you manage your close and your workflow; store information in a full content management system and seamlessly access it in FlexiFinancials.

Flexi’s open, non-proprietary architecture is based on the latest Microsoft standards and tools. It supports industry standard databases such as Oracle and Microsoft SQL Server and allows for easy integration through web services. The Flexi applications utilize Microsoft SharePoint to provide browser based, enterprise-wide content portal and workflow capabilities.

Is your accounting business relying too heavily on spreadsheets?

Accounting professionals have relied on spreadsheets since the mid-1980s when Microsoft Excel was first introduced, but the dawning of a new era in technology leaves many businesses questioning if their accounting departments are relying too heavily on spreadsheets.

Spreadsheet manipulation is often based on manual processes without proper checks and balances in place. Reliance on these imperfect systems leads to organization-wide decreases in productivity, questionable or inaccurate data, and poor organization—which ultimately affects your bottom line.

Spreadsheet reliance lends itself to decreases in productivity

Spreadsheets are notorious for bogging down accounting processes. While Microsoft Excel is a household name that most professionals have reasonable familiarity with, relying on it for financial purposes can be extremely time consuming. The time waste comes mostly in the form of consolidating data, modifying data, and finding and correcting small errors. Employee time is then spent correcting or consolidating data rather than analyzing it—where cloud-based accounting software could catch these errors and consolidate with ease.

Spreadsheet data accuracy can be questionable

Data can be inaccurate in traditional spreadsheets. Spreadsheets simply lack the sophistication that cloud-based accounting software has. This is because the spreadsheet document owner writes formulas to handle equations, and the spreadsheet will do exactly what the formula is written for–even if the formula you’re using to solve X actually solves for Y. Further, even if two spreadsheets access the same data from a centralized place (for example, an enterprise management system), the two spreadsheets may still result in mismatched data if the data is collected at different times.

Spreadsheets are poorly organized

Spreadsheets are not the cleanest way to view, sort, and analyze data. It is difficult to share data between sheets, and more difficult still to integrate data with other business software—or share data across departments. While cloud-based accounting solutions offer current data in real time to users, spreadsheets are not necessarily updated in real time, leading to dissemination of conflicting data.

Moving forward in a post-spreadsheet age

Cloud-based solutions are increasingly popular in finance, providing reliable, affordable software that accomplishes everything a spreadsheet can—but faster and more accurately.

Cloud-based systems like those offered by Flexi provide the most accurate and most current data, and data can be accessed anywhere with an internet connection. Laboring over spreadsheets to correct data and close the books can be a thing of the past with cloud-based solutions.

Is your Current Accounting Software Helping you to meet your Period-Close Deadlines on Time?

According to the Adra Match Market Survey in 2013, 61% of accounting professionals are unhappy with their financial close processes. That’s a lot of disgruntled accounting professionals, and for good reason: closing can be time consuming, difficult, monotonous, and frustrating with the wrong tools.

To maximize efficiency during closing, your organization needs the right software. Is your current accounting software helping you meet your period-close deadlines on time?

The top issues that prevent companies from meeting their period-close deadlines are communication, reconciliation, accuracy, and collaboration.

Communication

To encourage departments to provide your staff with data necessary for closing, start with the simple act of communicating with stakeholders. It may sound overly obvious, but the truth of the matter is that outside departments may have a tenuous grasp of the processes, workflows, and needs you have to close the books on time. Provide education to encourage understanding of how a quick and accurate period close can benefit all members of the organization.

Reconciliation

Reconciliation has historically been a tedious, manual process with a high probability of error. Software that automates reconciliation can align data from a variety of sources, saving you the time of formatting inconsistent data. Some close management software products include intelligent transaction matching, which provides even greater automation for reconciliation.

Accuracy

With reconciliation being such a manual process, it’s no surprise that data accuracy can come into question. With such limited time to close the books and such a variety of inconsistent data sources involved in the close, it is easy to make mistakes. Be smart about your software choice: choose products that streamline processes into repeatable functions, eliminating the opportunity for human error.

Collaboration

If your business is working in silos where each department manages its own data, how can you rely on the results? Collaboration across departments and entities is a necessity in accurate closing. Cloud-based systems afford the opportunity for real-time, sharable data that anyone with the right permissions can access 24/7 via internet browser. This way, you know the data that is being accessed by different departments and staff members is always the most current, most consistent data available.

Meet your period-close deadlines with Flexi

Choosing software that helps ease the pain points of communication, reconciliation, accuracy, and collaboration is the first step in obtaining more manageable period closes. The full suite of Flexi products aims to streamline accounting processes, saving you time closing the books on one period so you can move on to the next. Flexi products are cloud-based, non-proprietary, and compatible with Microsoft standards.

Ditch the manual, error-ridden processes: trust the accuracy of your data and reconcile with ease using state of the art Flexi technology.

Why a Daily Period Close Feature is Important for any Accounting Software

Daily period closing refers to the process of your staff recording daily collections from all sources, including cash, checks, and credit cards.

For some, a daily close may seem overwhelming. However, instituting daily closings can be hugely effective in managing a company’s accounting, ensuring that financial data is always accurate, and pinpointing discrepancies before they become issues. Daily closing also helps eliminate accounting discrepancies at the end of the month by keeping an accurate, day-to-day record.

The three biggest benefits of daily closing are reconciliation and theft prevention, catching human error, and prepping for month-end closing.

The importance of daily closes

Daily closings can help in a variety of ways, including preventing employee theft, catching human error, and assisting with the month-end closing.

Reconciliation and theft prevention

While virtually all business types can benefit from daily closes, it is especially useful for retail and service companies who may run the risk of employee theft. When reconciling on a weekly or monthly basis, it is more difficult to trace the missing dollars. By using a successful day-end close process, employees are held accountable for the collection of cash for goods and services rendered. Businesses with extensive monthly transactions also benefit from reconciling cash on a daily basis, allowing staff to know how much cash is on hand at all times.

Catch human error

Other benefits of daily closes include the ability to trace discrepancies to human error, like an incorrectly-keyed amount or payment method. Additionally, any adjustments to collection amount can be recorded as well, like cash taken from a register for an unanticipated payment. It’s also important that daily deposits match with your daily close amounts.

Prepping for month-end close

When activity is recorded as it happens on a daily basis, the month-end close experiences fewer discrepancies and moves at a faster pace. And, much of this day-end closing can be farmed out to departments outside of accounting. Daily or weekly reports can be generated by other staff, and accounting can reconcile these on an on-going basis, rather than waiting until the month-end close.

Start daily closing today

If you aren’t already, start the process of daily closing. Putting time and effort into the frontend will free up time during month-end closing, making month-end closing quicker and more reliable. Daily closing will also help you manage and track cash flow and theft.

Flexi offers a full suite of products designed to help you with your biggest accounting pain points, including closing. Check out Flexi.com for all of your accounting software needs.

Enterprise Accounting Software Doesn’t Have to Be Complicated – Flexi.com Makes It’s Easy

True to its name, Flexi is a flexible accounting solution provider.

At its inception, one of the primary goals of Flexi was to provide companies with a non-proprietary, feature-rich accounting system that could be scaled to handle millions of transactions, yet remain flexible enough to handle the unique requirements of any company. Openness was critical so that the software application could be easily integrated into any system.

Today, all of Flexi’s solutions are enabled through web services, allowing companies to streamline accounting processes.

How does Flexi do it?

Flexi.com offers the following perks with its accounting solutions, making it an uncomplicated solution that makes it easy for companies to scale.

Flexi solutions…

Improve Business Performance – Increase data accuracy by eliminating duplicate entries, automating manual processes and streamlining the approval process.

Reduce Expenses – Save on hardware, software, upgrades, technical support and licensing. Maintenance and support costs are built into a subscription-based, pay-as-you-go pricing model.

Enable Collaboration – Provide your staff with a continuous, mobile-ready connection that instantly syncs data when connected to the Internet.

Increase Security – Flexi adheres to strict International Organization for Standardization (ISO) security standards, as well as regular security audits.

Share Information – The cloud enables your staff to securely access data from anywhere, at anytime.

Are Proactive – As a fundamental part of your organization’s routine, utilize accounting software to continuously review financial data as business demands change.

Increase Confidence – A proven financial management system, used by over 800 businesses, allows you to adapt to existing and future market disruptions.

Gain Flexibility – Our flexible solutions enable you to react quickly to new financial rules and regulations.

Eliminate Unnecessary Expenses – Identify money that is consistently spent and classify areas of your business that are contributing to unnecessary cash outflows.

Enforce Payment Discipline – Assist in debt collection with automated notifications of overdue payment.

Bill Promptly – Send invoices as soon as products have been sold, saving time on sales follow up.

Increase Efficiency – Enable your organization to be more efficient through automating many of your manual processes, freeing your staff to devote their time to higher value activities.

Streamline Performance – Automate the integration between your front and back offices, and streamline the procure-to-pay process by introducing an electronic invoicing solution.

Simplify Distribution – Provide simple, fast report distribution, such as generating and distributing department financials, with just the click of a button.

The bottom line

Flexibility and scalability are hallmarks of Flexi’s solutions. With ease of use and years of experience, Flexi is a name to be trusted in the accounting space.