Nov. 17, 2022

This paid piece is sponsored by Eide Bailly LLP.

A version of this article appeared on eidebailly.com.

Do you recognize the festive holiday lights in Sioux Falls at the city’s namesake, the falls at Falls Park?  For many, it is a year-end tradition to visit the peaceful setting around the holidays.

Yet year-end can be an arduous, time-consuming process for business owners. From getting the books ready for close, to finalizing the budget and strategic plan for the future, preparing for year-end can feel like a yearlong endeavor.

If you’re struggling to close out the year efficiently, you’re not alone. Whether you’re discovering inaccuracies in your data or reconciliations that don’t tie back, or you simply are overwhelmed with tedious, manual processes, having the right tools in place can alleviate your year-end headache and ensure accurate reporting year-round, leading to a simplified year-end close.

Top year-end challenges — and how to solve them

On average, it takes organizations 30 days to complete year-end close. The biggest headaches related to year-end can be attributed to just two factors:

• Delayed, inaccessible or inaccurate data.
• Manual, time-consuming processes.

Delays in producing reports and inaccuracies in your data can be caused by a multitude of factors: inaccessibility, human error from manual entries or disconnected systems. The great news? By solving these root problems, you can be on your way to a simplified year-end close.

Business management software

Using the right business management software is truly the key to achieving financial efficiency. The financial analysis of your year-end data is leveraged to inform budgeting, forecasting and major financial decisions. However, your year-end financial statements are valuable only when they’re accurate.

Difficulty retrieving data across locations and a lack of uniformity in data collection prohibit a speedy and accurate close. Though 26 percent of accounting systems are able to close in less than one week, 34 percent take more than 16 days. While that may not seem significant, a delay of three weeks has a ripple effect throughout the rest of your organization — from finalizing budgets to simply understanding your overall financial health and performance.

Recognizing that you may not be on the right system for your organization or that you have outgrown your current solution is the first step to financial efficiency.

Think of your technology solutions as an employee at your organization. Just as you invest in your employees, you invest in having a financial system that can learn your organization and adapt as your organization grows. And, just as you work to fill your organization with the right talent, you also need to prioritize implementing the right technology for your business.

System integrations

A single solution or technology can do only so much on its own. Having the right tools doesn’t mean much if they can’t talk to each other in a language they all understand. After all, what good is an employee who does not collaborate well with others?

It becomes especially complicated when you have to rely on a different person with a specialized skill set to manually maintain all those tools. This is often where cloud native solutions can provide an advantage because they are built to integrate better across your organization; however, they still need to be stitched together expertly to gain the maximum benefit.

Integrating your tools allows visibility across multiple areas by tying your sales orders and customer records to your financial system, establishing the same universal data language for accuracy and trust in your data.

Process automation

When your tools are integrated and “speaking the same language,” the next obvious step to improve your operational and financial efficiency is to minimize — or eliminate — as many manual processes as you can.

Automating manual processes not only removes the risk for human error, but also it frees up valuable time for your employees to complete higher-value work that can have a greater impact on your organization. This results not only in higher job satisfaction for your team, but also enables your organization to do more with the resources you currently have available. If you can automate your processes, you can cut down drastically the time that it takes to close out the year.

Data warehousing and analytics

Centralizing your data in a data warehouse results in one single source of truth for your entire organization. With a data warehouse, your financials can be compared to external data for better forecasting and decision-making. This means that the executive leadership team can have more complete, holistic answers to a much wider range of critical business questions.

Data from your financials, customer database, marketing and sales, inventory, shipping and logistics, and employee information can all come together to tell a story of where your business has been, so you can decide where you want it to go.

Key to successful year-end close

Success and efficiency at year-end largely is dependent on the preparation and foundation you establish all year. If you are experiencing headaches trying to close out your year, it’s likely because of inefficiencies in your data, processes or technology. While there is no one-size-fits-all technology solution that will solve all your problems, there are solutions available to help tackle your challenges and transform your operations.

It is easy to look at the year-end process through the single lens of taxes and W-2s, but financial efficiency is enabled through leveraging the right solutions and innovations to improve and empower your people, processes and data.

A successful year-end starts with efficient systems and processes. When you have that, year-end just becomes another day. Not sure where to start? Our experienced advisers will help you develop an actionable road map to a more efficient year-end.