Published on: November 10, 2020
As the days tick by towards the end of the year, it’s time to take a fresh look at your accounting software. Yes, your accounting software, the technology you probably use every day to handle receivables, payables, and all the tasks that keep the financial side of the business running like clockwork.
Your accounting software can be a valuable tool for a smooth year-end close. Here’s how you can use it to discover common problems, resolve errors before year-end close, and finalize the information to close out the books.
Common Errors Your Accounting Software Can Help Uncover
Every year-end close you probably encounter one or more of these common errors. There’s a lot to accomplish during the final weeks of the year, and chasing after data isn’t high on your list of things to do!
Don’t let these issues slow you down. Use your accounting software now to discover:
- Inaccuracies, such as discrepancies between debits and credits
- Unpaid invoices lingering in A/R that should be followed up on
- Errors found during month-end closes that should have been followed up on (but weren’t)
- Any items missing that have been requested from departments
Once you have a list of missing items, schedule some time in your week to follow up on them.
Updating Accounting Software Records
Although not technically an inaccuracy, leaving old records active inside the accounting system can make searches take longer and lead to mistakes. For example, if you do not inactivate vendors your company no longer uses, the vendor list in the ERP system may become unwieldy.
Another common issue is inputting a vendor under one name, then adding it under another. ABC Systems may be listed as ABC Systems Inc, ABC Systems, or abc systems. Finding duplicate records, combining them, then deleting the unneeded ones should also be done once a year to keep your database clean.
Do not delete accounts that are inactive. Instead, mark them as inactive to save historical data. If you accidentally delete them, you may end up with problematic records.
Create or Refresh Standard Operating Procedures
Do you have standard operating procedures for monthly or quarterly closes? Now is the time to pull out the procedure documents and review them. Do the procedures still work or do they need to be updated?
It’s easy for old processes to be kept on file and unused because people rely on “institutional memory” —more commonly known as “the way it’s always been done” —instead of documented standard operating procedures (SOPs).
Creating or updating SOPs helps establish clear benchmarks and note the progress made towards benchmarks. Documented processes enable other managers to follow the same procedures and for newcomers to the team to learn them quickly. It’s also easier to spot bottlenecks and time wasters when you have a process to follow.
Ensure Clear Communications
Your ERP system can help you improve communication across multiple departments. It enables easier data sharing, which may be helpful when you need to sit down and review year-end budgets with managers. This also builds a collaborative process and enhances communication among teams.
Plan and Prepare for Year-End
Now is the time to begin the year-end process. Starting early and using your accounting software to help with the process will take some of the stress out of the task. Review SOPs, reports, and data, share it with the appropriate managers, and you’ll be ready for a fresh start in the new year.
For more information about ERP accounting software or to schedule a consultation, please contact Mindover Software, 512-990-3994.