Ah, the end of the month, quarter, or year! For accountants, this is crunch time, filled with reconciliations, adjustments, and the relentless quest for balance. Here’s a more casual take on some tricks to make your period-end closing smoother and less stressful, peppered with references to the kinds of data you’re likely juggling.
1. Get a Head Start on Reconciliations
Why wait until the last minute to reconcile your accounts? Reconciling your bank accounts, credit card statements, and intercompany transactions regularly throughout the month can save you a ton of time when the closing period hits. This way, your balances are already up-to-date, and you’re not scrambling to find discrepancies on the last day.
2. Automate, Automate, Automate
Let’s face it, manually entering data and cross-checking can be a nightmare. Use accounting software to automate repetitive tasks. For instance, set up automatic bank feeds that pull in transactions daily. This ensures your general ledger is always current, and you can quickly spot any anomalies.
3. Create a Closing Checklist
It might sound old school, but a good checklist can be your best friend. Have a list of all the tasks you need to complete, from adjusting journal entries (AJE) to finalizing financial statements. This keeps you organized and ensures nothing falls through the cracks. Plus, there’s a certain satisfaction in checking things off a list.
4. Review Accruals and Deferrals Ahead of Time
Accruals and deferrals can be tricky if left to the last minute. Regularly review your prepaid expenses, unearned revenue, and other deferred items. For instance, if you have prepaid insurance, make sure you’re amortizing it correctly each month so it doesn’t become a huge task at month’s end.
5. Communicate with Your Team
Keeping the lines of communication open is crucial. Regularly touch base with your team about where they are in their tasks. Maybe have a quick daily stand-up meeting during the closing period to catch any potential issues early. If Joe in AP is running behind on invoice entry, you need to know ASAP so you can adjust your plans.
6. Analyze Variances Early
Don’t wait until the end to analyze your budget vs. actual variances. If you notice that your expenses for a specific category are consistently higher than expected, investigate early. For example, if your utilities expense seems off, dig into it now rather than letting it become a bigger issue later.
7. Leverage Data Analytics
Use data analytics tools to get insights into your financial data. For example, tools like Power BI or Tableau can help you quickly visualize trends and anomalies in your financial data. This can make spotting issues much faster than sifting through rows and rows of numbers.
8. Keep Documentation Handy
Ensure all your supporting documentation is easily accessible. This includes invoices, receipts, bank statements, and any other documents you might need. If you’re using an electronic document management system, make sure everything is scanned and indexed properly. This saves you from the last-minute scramble to find that one missing receipt.
9. Double-Check Your Journal Entries
Journal entries can be a major source of errors. Before finalizing, double-check all your entries for accuracy. This includes making sure debits and credits are balanced, and that entries are posted to the correct accounts. If you’ve made a big entry, like recognizing revenue for a large project, ensure all supporting documentation is accurate.
There you have it—some straightforward, practical tips to make your period-end closing process a bit smoother. From regular reconciliations and automation to maintaining a solid checklist and open communication, these tricks can help keep the chaos at bay. And remember, taking care of yourself is just as important as taking care of the books!
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