A month-end close checklist is critical to ensuring a smooth and successful close process. Its purpose is to provide visibility into the status of each task, manage resources or deadlines, and reduce confusion as turnover happens or roles and responsibilities change.
If you’re an accountant, you’ve probably been responsible for a number of different checklists during your career. These range from a printed list or Excel file on your hard drive to shared files managed by teams.
If you’re in a leadership position, you’ve probably faced the common and ongoing challenge of aggregating the information contained in various month-end checklists to inform meaningful decisions and drive process improvements.
What if you could take it to the next level and manage your checklist with technology? A unified platform goes beyond Excel to enable automation, intelligent workflow, status visibility, a comprehensive list of tasks, and real-time dashboards for up-to-the-minute reporting.
Consider these four best practices to improve your month-end close checklist, and therefore your entire close process.
Choose a meaningful way to organize your checklist
What this looks like will be different for every organization.
You can organize your month-end checklist by balance sheet account, functional group, or entity. If you implement a solution to automate your list, you can also sort and filter by any number of characteristics that are meaningful to you and your team.
Identify the most essential criteria
Identify the criteria that are consistently important to know about every task and incorporate them into your checklist. For example:
- Which area of the financial statements does it impact?
- Who’s performing this task?
- When does it need to be performed?
Regularly evaluate roles and responsibilities
Often, it takes a big change like an acquisition or turnover to take stock of all the tasks that are being performed and who is responsible for them. And beginning that process in the midst of a year-end or transformation project can be especially challenging.
When everyone is using the same platform to manage their individual, team, and global processes, you have the information you need at your fingertips. And when processes are managed consistently, adapting to personnel changes or acquisitions becomes much less overwhelming.
Whether your checklist is automated or manual, evaluating roles and responsibilities on a regular basis can prepare your teams for inevitable change. If you have a handle on who is responsible for what, and when key tasks are being performed, reallocating and reassessing becomes a much quicker exercise.
Avoid having too much detail—or not enough
Regardless of whether your checklist is on paper or automated, finding the right balance regarding what level of detail to include is important. The most effective checklists exclude specific details that will change from month to month or require too much maintenance, but include enough context about each item to ensure that it could be understood by other teammates without significant incremental explanation.
In other words, if someone not currently responsible for a task can’t come in and gain a high-level understanding of a it from the checklist description, then it needs additional clarity or detail.
It’s also important to include enough items and individual tasks to drive accountability, make decisions, and get a good pulse on status—without requiring your teams to check a box or certify something every time they move a muscle.
Moving beyond the manual
So many accounting and finance departments are decentralized or in a constant state of change. Rather than having a standardized checklist and dashboards where leadership can easily see where things are, each accountant, entity, or location has a separate Excel file.
As a result, when someone joins or leaves the company, or an acquisition or divestiture happens, it’s a manual scramble to reassign or reassess responsibilities.
With a standardized approach, everyone can see what’s assigned to them, there’s global visibility, and it’s easy to update, maintain, and report on status and progress.
Excel is a powerful tool, but it’s not the best option for managing your month-end checklist. An automated solution turns an Excel file into a real-time dashboard that’s also integrated into the very processes its intended to track.
With automation, you can integrate your checklist and tracking process into the same platform where you’re performing many of your month-end close activities. Makes sense, right?
Think of it this way:
- What if you could have a task that references a recurring month-end journal entry and is automatically marked as completed when the entry is done?
- Or a task that references the certification of an account reconciliation and is completed when the rec has been reviewed?
- What if other items could be automatically certified based on dependencies?
This is what an integrated platform delivers, and why technology is such a differentiator when it comes to your month-end close checklist.
Learn more about how your organization can take your month-end close process to the next level with technology.
This article originally appeared in BlackLine Magazine and is republished by permission.