A better way to do month-end close

Published on: 8 December 2022
Written by: Daniel Rizza

What I wish I had known about the “Month-End Grind” when I worked in financial control.

If you’re an accountant and each month you find yourself asking the question ‘There must be a better way to do month-end’, then that makes two of us. Or at least it used to make two of us, because now I know.

I worked as a Financial Accountant in a finance department for just under a decade but when broken down further it equals:

  • 100-month ends
  • 2.5 years or 888 days of being ‘in month end’
  • Infinite amount of excel workbooks.

It’s fair to say that a chunk of my career was submerged in ‘month end’ and I can resonate with the common accountant’s pain points in business today. In hindsight, life as an accountant wasn’t as simple and easy as the university accounting textbooks told us.

The books prescribed that during a monthly close you:

  1. Close off the period for your P&L (Income and Expenses) and make any adjustments needed.
  2. Close Income Summary to Retained Earnings.
  3. Done.

They never mentioned the endless cycles of analysis driven by the unexplained or system error variances.

To name a few other examples I am sure will hit a nerve to the common accountant:

  • An error was identified after the fact causing resubmission of the numbers
  • Reoccurring post month end meetings to discuss potential efficiencies to be gained in the period close
  • Trying to build in the 100th contingency with an excel formula and locked cells in a workbook to not repeat the error from the month before across all my reconciliations.

Month-End – The Grind

A month end is essentially a point in time where we draw a line in the sand and analyse the business performance to that point.  One period closes and the next one opens which to me felt like a rinse and repeat process.

In turn it meant many adjustments, accruals, transfers, revaluations, and allocations needed, all driven by the constant pursuit of accuracy and triggered by timing. I am sure the broader accounting network would agree with me when I say that sometimes period closes can get messy quickly, all while having to adhere to those tight deadlines which is a recipe for silly mistakes and misstatement. I know I made my fair share and found a few as well.

Talking from experience and as noticed by the wider accounting community is the emergence for real time financial insights by senior leaders earlier on in the financial close, for me this hit its peak during the height of COVID. Now overlay that with remote working which made month end feel daunting and sometimes impossible. 

By spending more and more time on ad-hoc analysis and financial data slices during the financial close, the standard month end tasks were placed on the back burner and therefore have to be completed in a shorter time frame ultimately pushing the team into rushing and taking short cuts just to get the job done.

When month end overlapped with other business competing demands, being almost every single period close, it’s the balance sheet reconciliations that usually take the back burner and are completed outside of month end. This is where the potential for misstatement comes into play and those insights given to leaders instantly lose credibility. Practically speaking, P&L accounts are temporary and are an accumulation of costs analysed over a financial year which are scrutinized in individual months and reset yearly. Whereas balance sheet accounts are continual or a cumulative aggregation of activity from inception.

So, I ask you why do we always generally place these on the low priority list? It’s something that never made much sense to me.

Furthermore, these reconciliations were completed in MS Excel just like many businesses. But upon reflection those reconciliations were:

  • not uniformed
  • messy
  • too simple
  • complex
  • riddled with broken links and formula errors
  • made up of multiple versions without clear indication of which balances were final.

There was also those late adjustments or amounts posted to a balance sheet reconciliation post completion that appeared by surprise which were the most triggering.

For me, this area of the finance close lacked governance and controls and workflow. On more than one occasion the lack of controls in this space created material misstatements in the forecast and budgeting process due to the sheer lack of oversight. To loop back to my initial statement, it was times like these when I would constantly ask myself ‘There must be a better way to do this’ and the main catalyst for my career change and passion to drive efficiency for accountants.

Month-End – Reflection

In hindsight, my finance team just didn’t have the necessary processes and technology in place to achieve the needs of management or be efficient at month end, not enabling us to be that ‘value added’ business partner to the wider business.

I knew the problem, but I didn’t think a solution existed. For my former classmates and colleges their month end experience was the same, so I just assumed that to be the norm industry wide. Ironically, I only knew how severe the problem was when I left ‘The Grind’ and joined Tridant to help organisations implement BlackLine to find that better way of completing month end.

The first time I heard of BlackLine was when a recruiter reached out to me asking if I would be interested in helping an organisation adopt it. Having never heard of it before, I went on YouTube and found some videos. I immediately saw the value and how it would have helped with all the pain I had experienced during my time in finance.

Now I get to see that value every day working with my former finance colleges.

Want to know the specific value BlackLine can bring to you and your business? Download our Accelerate Your Monthly Close eGuide to take the first step to transforming your month-end close with modern accounting software.

About the Author

Daniel Rizza worked as a Financial Accountant for 9.5 years and has 11 years experience within the accounting industry. After regularly experiencing common pain points faced by accountants at month-end, he joined Tridant in 2022 and now helps businesses solve these problems through the use of BlackLine Automation Technology.

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