GP Dynamics Specialists
The central value proposition for continuous close — faster access to the financial information that drives decision-making — brings a cascade of other benefits.
On-demand closes: Breaking up the work required for a monthly close means whenever a business decides to officially close the books, it’s a fast process. Organizations still need official financial statements for investors, the board of directors and, in the case of a public company, shareholders. Finalizing those statements, however, will no longer have accountants spending nights and weekends at the office because the close doesn’t involve a tidal wave of information.
Empower accounting and finance: When closing the books isn’t sucking up two or three weeks every month, accounting and finance staff now have time to interact with colleagues. They can act as a mission control for financial insights, an extremely valuable resource for the organization. More broadly, accountants can take on a strategic role — they’re not just counting the beans, they’re growing them, too.
More informed decisions and a higher CFO profile: Immediate access to critical financial data — including basic KPIs like revenue, cash and days payables outstanding (DPO), along with industry-specific stats — leads to better-informed decisions. Informed decisions set up a company for success and growth. A more proactive accounting function should ultimately give CFOs a stronger case for finance team members being strategic business partners who can concentrate on activities that, as Accenture notes in its “The CFO Reimagined” report, are not amenable to automation, like planning, analysis and advisement.
Improved data integrity: Even companies that automate their accounting will occasionally have errors, usually introduced at initial data entry. When someone reviews key information daily, these mistakes are more likely to be spotted before a missing period turns into a bigger problem. The same goes for spotting fraudulent transactions. And, the more accountants practice this routine, the better they will get at it, improving overall data integrity, Kelly said.
Less staff burnout: An accounting team freed from the drudgery sometimes synonymous with the monthly close should be happier and more motivated to collaborate with business colleagues. Younger accounting and finance staffers in particular have a lower tolerance for such repetitive work — they don’t want to be “spreadsheet jockeys.” Reducing employee churn saves money.
Easier compliance and auditing: The less manual intervention in a business’ accounting processes, the more likely that organization is to stay compliant with statutory requirements like ASC 606 and IFRS 15. With all that information in an automated system rather than spreadsheets, auditors can easily see the source of everything because relevant files are attached to all records and transactions. They can answer many of their own questions. An organization could even consider an open-book audit, where it gives the auditor read-only access to its system instead of handing over binders of printouts, Kugel said. The same goes for a bank, investor or landlord that needs to review data.
Culture of continuous improvement: If we look at the finance team as a “numbers factory” that takes data (raw material) and turns it into financial statements (final product), it makes sense to adopt the continuous process improvement philosophy popular in manufacturing. Accounting standards, the state of markets and technology change quickly, and continuous process improvements allow the finance team to keep pace. The continuous close will encourage this mindset and keep accounting on the cutting edge.
One important note: A true continuous close doesn’t mean just spreading the same tedious manual processes over the month. All that’s doing is front-loading work. Automation is what makes a continuous close possible — and a lack of technology is one of the biggest barriers to adoption.
Jon Barkman founded the company 22 years ago and works with a number of companies specializing in warehousing, inventory, freight, trucking, accounting and telco as well as government. He specializes in financial systems.
Aidan Barkman is an Associate and works with Full-Stack Development, GP Dynamics and SQL. He is an enthusiastic professional who is eager to contribute to team success through strategic attention to detail and excellent organizational skills. He has a solid understanding of backend and front end and end-user needs.