Accounting teams always welcome a way to speed up the monthly close process, but it's difficult with so many moving parts to account for. The challenge has contributed to the rise of continuous accounting, an approach that aims to leverage modern tech such as AI to automate processes and optimize resources while providing improved real-time accuracy.
Most organizations are early in their adoption of continuous accounting principles. But there are a number of accounting-centric solutions on the market that help teams automate high-volume processes, the idea being to eliminate mundane tasks so teams can focus on more valuable work and speed up the monthly close.
For most businesses, the monthly close is simply too time-consuming. A
That five-day gap between top and bottom performers is significant. Five days is essentially an entire workweek, so imagine having an extra week each month to focus on strategy, financial forecasting and otherwise helping move the business forward.
That said, accounting teams understand the why behind the time it takes to close the monthly books. It can be a tedious process with numerous factors to consider, and maintaining thorough visibility and accuracy is a huge challenge. Dedicated accounting software helps ease the pain, but more and more teams are starting to realize that continuous accounting is a secret weapon to shave hours or even days off the process each month.
Three ways continuous accounting speeds up the monthly close
Closing the books manually is not only time-consuming, but it can also ultimately create even more confusion and inaccuracy. When this is the case, accounting teams spend hours and even days each month on the close process instead of focusing on more specific and pressing business challenges they might have. By embracing automation and continuous accounting principles:
- Expenses are updated and tracked in real-time. When a modern corporate spending strategy is in place, every individual corporate and employee expense can be logged and updated as it happens. This makes it much easier for accounting teams to confirm all transactions for the period, including accounts payable and recurring bills such as SaaS subscriptions. Automating mundane and repetitive parts of the process also allows organizations to set up predefined rules for expense approvals, meaning non-approved expenses can’t and won’t happen. Confusion is thus eliminated because accountants don’t need to sift through transactions and determine which are approved and which are not.
- A centralized system ensures the potential for errors is eliminated. When automation is used to log and track all business and employee expenses, it eliminates human error since there is no need for manual data entry to keep track of each individual transaction. In turn, this greatly reduces the time it takes for teams to cross-reference records and verify transactions. They know each transaction is accurate because it was logged automatically the instant the purchase was made. A wider benefit is the ability for decision-makers to view and analyze spending patterns in real-time and gauge where the business stands against its goals and forecasts.
- Reconciliation accelerates thanks to automatic receipt collection. Another welcome side effect of automatically logging transactions as they happen is it eliminates the need for accounting teams to chase down receipts. Not only does this make the reconciliation process much more efficient, but it also improves the employee experience across the board because team members no longer need to worry about saving receipts and reporting expenses on a monthly basis. Expense management is a tedious fact of life for most businesses, but automating the process removes the mundane portion of this exercise for employees.
While savvy businesses are already tapping AI technologies to automate various accounting tasks, most could stand to do more to help ease the pain of the monthly close. Deploying a continuous accounting strategy is an avenue that does this while also providing many other business benefits and making the lives of employees easier.
