By Jennifer Toomey, Senior Director, Cloud Business Group, Oracle
For small-to-medium businesses (SMBs), the monthly financial close can be a daunting effort. For the last week of every month, and sometimes longer, finance teams scramble to pull numbers together, check them for accuracy, and assemble them into a final report. It’s a cycle that never ends, and that few SMBs seem able (or willing) to get ahead of.
Why does the monthly close take so long? The reason is that too few SMBs have automated the process. They’re still relying on spreadsheets and manual work.
It’s not hard to see the appeal of spreadsheets; they’re cheap and flexible, and even the most recent college graduate knows how to use them. But spreadsheets are managed by people, and people make mistakes. The potential for error grows every time someone touches the data.
This leads to long hours spent double-checking formulas, fixing mistakes, and consolidating multiple spreadsheets into a final set of numbers. Even with all this, the chances that a mistake might slip through the cracks are uncomfortably high. And if a mistake is made, the consequences can be disastrous; just take a look at our recent article about the costliest spreadsheet mistakes in history.
On top of the financial risks, there’s the issue of staff burnout. SMBs tend to have small finance teams, and they are already overloaded with work. Piling on a manual close every month entails a lot of long hours, at a time when employees (especially Millennials) are seeking a better work-life balance. As FEI’s Ken Judd recently wrote, this is leading to a critical shortage of finance talent and fierce competition among SMBs to hang onto the talent they have.
There is a better way, and it can be found in the cloud.
According to Ventana Research, companies that use spreadsheets extensively throughout the close process take an average of 8.2 days to close their books. In contrast, those that automate the majority of close tasks, using spreadsheets only for complex work, can close their books in 6.2 days.
In short, automation can shave a full two days off the monthly close. That’s 24 days a year that your finance team could spend evaluating growth strategies, like a potential acquisition (or even taking a vacation to avoid burnout).
In general, a strong end-to-end financial close should:
Moving finance to the cloud is an essential first step in automating the close process. SMBs should consider finance solutions that:
A great example of the power of automation is ConnectOne Bank, recently nominated for a Change Agents of Finance Award. Headquartered in New Jersey, the bank has annual revenues of $152M and prides itself on personalized service. By automating nearly all of its finance and accounting processes, ConnectOne Bank cut seven days from the monthly close, eliminated manual intervention, ensured data integrity, and saved 17 hours of work monthly on checking its figures.
In an era of unprecedented change and fierce competition for talent, finance teams can scare afford to waste time on manual processes that could easily be automated. And with the advent of the cloud, such automation is now available at a cost that even small companies can afford.
So, don’t waste another painful month trying to close the books with spreadsheets. Invest in automated financial close solutions in the cloud. You’ll spend less time on manual effort, and more on the business plans and strategies that will help grow your business.