It’s always festive at year-end close for accounts payable professionals. And when we say “festive” what we really mean is “hectic.”
That’s why we’re giving you the tools to have a successful year-end close. You can find a whole slew of checklists that we think can help at the bottom of the page, but we also think it’s important to talk about the broad strokes.
Throughout the year, your team probably runs on a loosely organized set of roles and responsibilities. You know who’s approving which invoices, where to send different categories, and how to work together.
But when crunch time comes around, especially if your department is paper heavy, people start to get nervous. There all of a sudden might be extra ad hoc checks and balances implemented for the close. And someone might think it’s necessary to put new people in new supervisory roles to double-check balances to make sure things are being processed right. And, especially for large companies, all of a sudden the CFO is working with you for the first time.
So you’re all on edge, making sure you’re doing everything right. And you might feel like people are looking over your shoulder. And this is where the potential communication breakdowns show up: there are just too many new people in new roles with new procedures. Which of course, can lead to suppliers getting paid late, or entries made in error.
If the scenario above is giving you flashbacks, it’s time to review past closes. You want to take a step back before you dive in to the close and review your checklists you already have, define and communicate your roles and responsibilities before you start, and ensure that everyone is not only working together on a plan of action, but understand what they need to do if anything changes.
Working hand in hand with organization is communication. We’ve already mentioned above how critical it is to communicate the organizational roles and responsibilities of the close. After all, to effectively organize your team for a lights out close, you need to communicate those plans to your team.
Speaking of your team, the close is a team effort. It takes coordination and communication. Checklists help you focus on the basics and set a baseline plan of action for your close. Be accountable and work on the success of your close throughout the year, not just in the final few weeks. That means leaving open communication channels for your whole team. Your CFO and controller should ideally be open to suggestions and new improved checklists. Even if it doesn’t look like a major wholesale systemic improvement, a simple checklist can make your close go from chaotic to comfortable.
A well-run company should have a standard review process after your close. Take steps after your close to set up an actionable plan to look ahead to the next close. Review the bottlenecks from the last close. Look at the cycle times. See how you can fix them. What you’ll likely find are simple steps that can improve your workflow the next time around. And if you’re a paper-heavy company, it’s probably time to take a look at automating those workflow approvals. You can get rid of redundant reviews and help speed up the whole process. And bonus points if your AP process is automated, since ideally you’re already set up at the beginning of the transaction to have many of the headaches of the year-end close resolved.
So take a look at our checklists. We think they’re pretty helpful. And who knows, by the end of the process, maybe you’ll even have some time to kick back and relax by a crackling and cozy fire.
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