Year-end: There’s more than just W-2s and 1099s to get through. Your finance staffers have a slew of tasks to complete by December 31. Unfortunately, there’s a lot working against them.
Not only do they have to complete all their usual work in addition to closing the year, but many processes are bogged down by little inefficiencies that derail their efforts.
We’ve heard from one expert who evaluates your peers’ year-end processing. She’s revealed the five biggest difficulties she’s seen in companies of all sizes and in many different industries.
Take a look at what they are so you can be confident you’re not unknowingly in the same boat.
Difficulty 1: Inconsistency
There are any number of ways inconsistent processes can wreak havoc with your year-end close. Check specifically for these three most common instances:
- Multiple people perform the same task differently. This can be because you have multiple locations or even just multiple staffers charged with the same responsibility.
- The same task performed differently by the same person every time. Watch for this one: It can happen with the most conscientious of staffers. In fact, that’s when it usually happens because the person is continuously tweaking the way he or she does things to make it better the next time. The only problem: There’s no consistency and that’s how errors can creep in.
- Turnover. Of course turnover happens. But if the new finance staffer can’t follow the previous staffer’s logic, that’s where the problems creep in.
Difficulty 2: Confusion over responsibilities
If everyone on your team doesn’t understand his or her close responsibilities, you could end up with a mess on your hands. To ensure this doesn’t happen on your watch:
- Specify not only what each staffer must do, but when it needs to be done.
- Communicate your expectations on how it should be done, and
- Explain how each person’s year-end close responsibilities fit in with the larger picture.
Each of these should help increase accountability.
Difficulty 3: Redundancy
It’s easy to see how this can muddy the yearly close if you have multiple people in multiple locations doing the same task. But that’s not the only way redundancy can undermine your process.
Often, the same task gets performed multiple times throughout the close when it doesn’t need to be. Mapping out the close can help you spot redundancies that are keeping your year-end from being as efficient as it could be.
Difficulty 4: Bad timing
Another reason redundancy sometimes creeps in: timing. In the year-end close, many steps build off each other, so you can’t do the next until the one before it is completed.
But there are some tasks that are independent. And if you can identify them it’s possible you can get some of those done earlier in the cycle, long before the final flurry of the last days before the close. Even if you can’t get the entire task complete, you may be able to knock out the bulk of it in advance and then revisit it later.
Difficulty 5: Lack of communication
Of course, even when a staffer completes a job on the year-end to-do list, if no one gets alerted it’s complete, the whole process gets held up.
Make sure your department has a system for letting co-workers – or you – know when a task is complete to keep the trains running.
Adapted from the presentation “Creating Process Flows to Streamline the Year-End Close,” by Jessica Gulliver, Senior HFM Consultant, MidStream Analytics, at www.proformative.com