The Role of Technology in Streamlining Year-End Close Procedures
According to the report of INSIDE public accounting, the fastest-growing accounting companies are those that invest in cutting-edge technologies. Earlier, when there wasn’t a technological advancement, people used to perform accounting tasks manually. They used to record transactions manually in ledgers, journals, and other accounting documents.
Also, accountants would need to manually calculate balances, prepare financial statements, and generate reports. The traditional method was error-prone. However, with the rapid technological advancements, the way of performing the same tasks has been revolutionized. Today's highly effective technical solutions enable the automation of almost all tasks in the accounting process, greatly enhancing the smoothness of month-end and year-end closings. The technological evolutions in the accounting domain help you reduce the human effort to accomplish tasks. This can have a significant impact during the year-end close rush.
In this blog, we will walk you through the role of technology in streamlining the year-end close. Also, we will recommend some of the best tools to close your books faster during the year-end close.
Types of technology that can be used to streamline year-end close
The year-end closing process can be streamlined by using a variety of technologies. The most recent technologies that we employ to streamline operations are listed below.
1. Accounting software:
You can simplify many accounting tasks, such as account reconciliation, journal entry preparation, and financial report generation, with the help of accounting software. QuickBooks Online and Xero are the 2 major platforms accounting firms use to manage their accounting operations.
2. Financial consolidation software:
Financial consolidation software can help businesses automate and streamline their financial consolidation process with the use of specialized technology. This technology combines financial data from multiple entities to provide comprehensive visibility of financial performance within a single firm or group of related businesses.
3. Review and close management tools:
As the year-end approaches, there is a growing demand for effective review and close management tools. It is because these tools can accelerate your reviewing and closing process, maintaining high accuracy. Xenett stands out as the top choice for accounting firms due to its remarkable ability to autodetect errors in accounting books, minimizing the need for extra manual effort. Moreover, the convenience of the XenettGo extension that works inside QuickBooks and Xero eliminates the hassle of switching between multiple apps.
4. Task management software:
Task management software is critical for firms in monitoring and controlling the year-end closing procedure. This crucial tool serves as a dependable means of ensuring that all critical tasks are completed on time, leaving no room for error. Furthermore, it keeps all stakeholders involved in the process, resulting in a smooth alignment of roles and a streamlined year-end close.
5. Financial reporting software:
Financial reporting software is a crucial asset for accounting firms who want to provide accurate and timely financial reports. This adaptable software not only speeds up report preparation but also assists businesses in adhering to complex financial reporting requirements and standards.
Benefits of using technology to streamline year-end close
There are numerous benefits of using technology to streamline the year-end close process. You can not only improve the accuracy of your books but also complete the tasks quickly. Here, we have highlighted some of the most significant benefits of technology solutions for the year-end close.
- Improved accuracy:
Technology advancement can help you reduce the risk of errors and improve the accuracy of your books. You can effortlessly reconcile and identify discrepancies if there are any. Tools such as Xenett can help you autodetect errors in your books so that you can generate accurate reports during the year-end close.
- Reduced time and effort:
Numerous technological solutions are available to the account team that can help them save hundreds of hours of productive time during the hectic year-end close. Karbon is one such cloud-based tool that helps you manage all your accounting tasks. It can automate repetitive tasks so you can focus on your core work.
- Enhanced collaboration:
Modern technology can help you collaborate effectively, be it with your internal team or clients. Asana is one of the best tools that can help you collaborate and manage your overlapping tasks effortlessly. When you use these sorts of technological solutions during the year-end close, you can streamline the process and ensure everyone is on the same page to accomplish the tasks rapidly.
- Increased visibility and control:
There are many technological solutions available for providing real-time dashboard access to financial data. You can take your business to new heights if you have access to fast insights. With the help of this, businesses can quickly identify possible problems and create relevant action plans. In this regard, Sage Intacct stands out as a top platform for providing improved visibility and control.
Latest technology trends in year-end close automation
In the recent past, a slew of new technologies have made substantial inroads into the accounting industry. These are a few examples:
- Artificial intelligence (AI)
With the arrival of ChatGPT in the market, the world of technology solutions has drastically changed. The impact can also be seen in the accounting industry. Artificial intelligence (AI) has great potential to transform the year-end closing process completely. It can effortlessly automate a wide range of functions, from detecting and identifying irregularities in financial data to meticulously detecting errors in the books and generating accurate financial reports.
- Machine learning (ML)
Machine learning (ML) adds another dimension to this technological transformation by exploiting past data to identify nuanced patterns and new trends. This knowledge-based trend analysis is then used to automate year-end close procedures, improving both the accuracy and efficiency of the entire process.
- Robotic process automation (RPA)
Robotic process automation (RPA) enters the picture as a potent ally in dealing with repetitive and rule-based chores associated with year-end closings. RPA can effortlessly streamline tasks like account reconciliation and data entry into accounting software, considerably improving operational efficiency.
How to implement technology to streamline year-end close
If you are planning to implement technology to streamline the year-end close process, you must consider these things.
- Assess your current year-end close process:
Before commencing the implementation of any technology targeted at expediting the year-end close process, it is crucial to consider your company's requirements and financial limits. Furthermore, it is critical to rigorously examine and locate the specific tasks that are both time-consuming and prone to errors. This detailed assessment will help you to pinpoint the precise areas where the incorporation of technology improves task execution efficiency.
- Research different technology solutions:
As previously discussed, there are a variety of technical options available to help you streamline your year-end closing activities. It is suggested to research the different options extensively and carefully select the one that best matches your company's specific needs.
- Train your staff:
Following the implementation of the chosen technological solution, it is essential to train your staff on how to use it optimally in order to achieve the best outcomes. Furthermore, you can enroll in training sessions provided by the tool provider, which can be beneficial in ensuring proper tool utilization and effective streamlining of the year-end closing process.
To sum it up, technology has been playing a vital role in streamlining the year-end close process. When we choose the right technology solution, we don’t have to put in much effort to accomplish the accounting tasks.
Accounting firms must use the necessary tools to automate repetitive tasks, find errors in the books, and close faster. As mentioned at the beginning of the blog, the fastest-growing firms always invest in the latest and the best technology solutions. To take your accounting firm to the next level, you must follow the same path. Book a demo call now if you want to know more about Xenett.