How Can I Shorten The Time to Close the Books Each Month?

Timely month-end closing requires you to:

Work smarter, not harder.

I know you’re not slacking but you probably don’t know where to start to reduce the time it takes each month.  I want to offer some practical tips – to help you shorten the time to close the books! 

Automate Systems/processes

Are you using the same systems and processes that you inherited? So much has changed.  Even in the last year!  The #1 opportunity you have = automate what’s been manual.  There are incredible platforms that provide robust computing power to converting manual processes to digital process.  This will save you time, improve the record keeping details and reduce errors - which can also be very time consuming to find.

For example: Online expense reporting tools that sync with credit card accounts.  Why would this save time and money?  These tools provide:

Complete list of charges = Less time searching for what expenses are missing. 

Employees can add receipts from a mobile device or drag and drop on a computer = High level review capability to see which charges are missing receipts. 

Quick coding of expenses from simple drop-down menus. Employees often repeat purchases = Future time saved.  Once they code something the first time, they can save a rule that automatically codes the expense to the proper budget/account code for the next time.   

Use approval rules for a customized approval process = completed online with system generated notifications to approvers. 

Syncs to your accounting system or can be transferred by an export/import step = saving data entry time and increasing accuracy. 

Accounting software

When was the last time you looked at options available to your type of organization? Ask yourself, what percentage of my work is done manually.  This could be an indicator that you need to reevaluate. The software service market is evolving very quickly and there are very robust systems now available that accomplish automation goals and enhance your financial reporting. 

I know a change like this can feel overwhelming.  But imagine the pain you will alleviate in the long run.  Time invested in a system conversion will yield dividends and results that return to you exponentially over time.  Take the long-range view when thinking through this. 

Shorten your month end checklist

Do you process deposits and payments throughout the month, only to come back at month end and make sure everything is recorded in the accounting system?  Do you leave the general ledger posting until the month ends?  Do you spend time after a month is over making a mad dash to make sure every transaction is recorded in the accounting system?  This is putting off for tomorrow of things that could have been done today.  This makes the month end closing process much longer than it needs to be. Use the “one-touch” system.  Only touch a financial transaction once.  If you’re sending out a payment, immediately after processing the payment – record it in the accounting records.  Code it, file receipt/supporting documentation electronically, and post it to records.  Touching financial transactions once will increase accuracy and reduce the time it takes to close the books. 

Month end closing procedures should be focused on reconciliations and reviews. Reconcile your bank statement, your credit card statements, your accounts payable, and subsidiary ledgers to the accounting records (donor giving systems separate from accounting software).   Then review financial reports for trends and patterns. 

Automate your month end checklist

Chances are most of what you do at month-end is in your head?  Each month you go through the same mental check-list.  I recommend automating that checklist month end process into a project management software such as Monday, Asana, or ClickUP.  Or worst case, use a spreadsheet to document the month-end closing procedures.   Automating the checklist is important to serve as a backup should something cause you to be unable to close the books one month.  It also creates a tool to communicate collaboration needs with other team members and dependencies between employees work.