It’s month-end close again, and you’re already feeling the pressure. You have a stack of invoices to process, bank reconciliations to complete, and financial statements to prepare. And to top it all off, you’re short-staffed.
The accountant shortage is real, and it’s hitting businesses of all sizes hard. Month-end close is a challenging time for understaffed accounting teams. At the month-end, your finance and accounting teams reconcile the previous month’s transactions for compliance and accurate financial analysis. A solid flow is necessary to close each month, from gathering information to producing the final financial report.
With fewer accountants on board, firms may face delays in their month-end closing process, leading to late financial reporting and skipped deadlines.
But don’t panic just yet. There are multiple things you can do to overcome the accountant shortages and ensure a successful month-end close.
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Is Increased Workload Driving Accountants to Burnout and Then Resignation? What About Your Month-end Closing?
The accounting industry is facing a perfect storm of accountant shortages and burnout. According to a study by the University of Georgia and FloQast, almost all accountants (99%) experience burnout, leading to feelings of exhaustion, inefficiency, and alienation from their jobs.
This is a serious problem for businesses of all sizes, as accountants play a vital role in financial management and compliance. It’s simple: when accountants burn out or become exhausted, they quit after a while. And when businesses don’t have enough accountants, they’re more likely to make financial mistakes and miss deadlines.
Jeff Phillips, CEO of tax and accounting advisory Padgett Business Services and founder of the recruitment firm Accountingfly, says that the accounting industry is “set up to burn people out.” He believes the industry needs to do more to address burnout and create a more sustainable work environment.
What To Do? We are Here with Solutions:
Phillips further suggests that firms should offer more flexible work structures and provide their accountants with the necessary resources to be satisfied with their jobs. He also believes the industry needs to do a better job of attracting and retaining young talent.
Indeed, this is only one of the possible solutions among many. Let’s explore how you can optimize your month-end closing process.
Automation: Less Manual Work, More Value, and a Lot Less Stress
Automation can play a critical role in helping firms with a shortage of accountants overcome the challenges of month-end close. By automating manual tasks, such as data entry, reconciliation, and reporting, automation frees up accountants to focus on more value-added activities, strategic analysis, and finalize the accounting data for the month, especially in the month-end closing.
Automation significantly improves month-end close processes by reducing accounting cycle time by one to two days, decreasing the number of CCR-related emails by 5,000 per month, increasing cross-functional labor efficiency by 3 percent to 5 percent, and reducing journal posting time by 300 hours.
CCR-related emails are communications about the month-end close process in accounting that may include discussions, notifications, or requests for information or approvals for financial transactions, adjustments, or reconciliations.
Automation also improves month-end close in more ways, such as:
- Streamlining Workflows: Automating the handoff of tasks between different departments or teams helps to identify and eliminate bottlenecks in the process.
- Improving Visibility: Having standardized automation software enhances visibility into the month-end closing process by providing real-time updates on the status of tasks.
- Reducing Risk: It reduces the risk of errors by eliminating the need for manual intervention.
An accounting team can use automation software to free up accountants from the time-consuming tasks of manually reconciling bank accounts, which includes the automation software downloading bank statements, automatically matching transactions, and highlighting any discrepancies.
Accounting software: Less Hassle, More Efficiency!
Month-end closing involves a lot of work, making it an error-prone process, especially if you’re still using manual methods. That’s where accounting software comes in. Accounting software can simplify many of the tasks involved in month-end closing, saving you time and reducing the risk of errors.
Here are some of the critical advantages of using accounting software for month-end closing:
- Reduced risk of errors: Accounting software expedites many of the tasks involved in month-end closing, which helps to eliminate errors caused by manual data entry. For instance, accounting software can automatically reconcile your bank and credit card accounts.
- Improved efficiency: Accounting software streamlines the month-end closing process, making it more efficient and less time-consuming. For example, it can automatically generate financial reports, such as balance sheets, income statements, and cash flow statements.
- Enhanced visibility: Accounting software provides real-time visibility into financial data, which can help you to make better business decisions. Accountants can use accounting software to track sales, expenses, and cash flow on a daily basis.
Implementing accounting software can make a huge difference in your month-end closing process, saving you time, reducing the risk of errors, and helping you make better business decisions.
Flexible Work: More Output, No Burnout, Zero Constraints
During the month-end closing process, accountants often need to work long hours to ensure timely completion of all tasks. Flexible working would allow them to respond to unexpected events; thereby, they can meet deadlines and maintain a healthy work-life balance.
One way to do so is deploying cloud-based accounting software that allows accountants to access data from anywhere, at any time, to work on month-end closing tasks even if they cannot reach office due to some circumstance.
67% of accountants prefer cloud-hosted accounting solutions over on-premises software, and businesses that switch to cloud accounting see a 15% increase in revenue.
Also, opting for cloud-based accounting software makes it easy for businesses to access their data in real time. It fosters collaboration by enabling team members to work on the same document simultaneously, ensuring that everyone is on the same page.
Finally, cloud-based accounting software can simplify many tasks involved in month-end closing while bringing tons of benefits to firms.
This is not all; accounting software on the cloud brings significant benefits to businesses. See how it can help, read more: How Cloud Accounting is Useful for Businesses?
Outsourcing Non-Core Accounting Tasks
A recent survey of small businesses found that 83% of small businesses are planning to increase their spending on outsourcing non-core accounting services in the coming years.
Businesses outsource non-core activities so that internal teams focus on more strategic initiatives. Some non-core accounting tasks you can outsource at month-end include bank reconciliations, accounts receivable management, accounts payable management, payroll processing, fixed asset management, and more. Accounting businesses outsource non-core accounting tasks for a variety of reasons, including:
- To improve efficiency and productivity: Outsourcing non-core accounting tasks frees accounting businesses to focus on more strategic initiatives, such as providing clients with tax advice and consulting services.
- To reduce costs: Outsourcing can be a more cost-effective way to handle non-core accounting tasks, especially for small businesses with limited resources.
- To scale their business more easily: Outsourcing can help accounting businesses scale their business more easily by allowing them to add or reduce resources as needed without hiring and training new staff.
The Bottom Line: How Modern Closing Process Is the Key to Success?
Shifting to a modern approach for the month-end close is a strategic approach that brings advantages to the firms in the long run. Firstly, it brings speed, efficiency, and real-time insights to the process by reducing manual labor.
Also, bringing accounting software and automation ensures the records are error-free, thus improving the accuracy of financial statements. Simply, put, month end closing is the best way to reduce dependency on a large team of accountants. This means you can manage the workload efficiently even with a smaller staff.
If you want to modernize your month-end closing process, several resources are available to help you get started.
Talk to our experts at:
+1 855-270-6252. They will help you assess your current process and develop a plan to move your accounting software to the cloud.