How do you ensure a smooth accounting close? Automate your transactions and standardize your processes to ensure accurate data. And avoid manual entry like the plague!
When it comes to closing the books, most finance teams start with the same basic challenge: “How efficiently can we tally up every single transaction, with as little time as possible spent on fixing errors?”
Given that the vast majority of errors are due to discrepancies caused by manual entries, you want to make sure that all your transactions throughout the month are as automated and standardized as possible – whether that’s a new sign-up, a change in a subscription, or a renewal.
Automating these transactions as they happen keeps your team sane and your data clean, which is particularly crucial during times of the year with traditionally high transaction volumes, such as the end of the quarter for B2B companies, and holiday seasons for B2C companies. While standard transactions are relatively easy to automate, more complex ones might require extra attention, including:
Ensure that you have a repeatable and automated way to summarize your invoices every month for your accounting system. Teams often do this by standardizing and automating billing processes across new sales, renewals, expansions, and upsells – this allows for lean billing teams to scale even as transaction volumes increase.
The more standardized these transactions are, the more likely that your Accounts Receivable team will need to spend less time on reconciliation at the end of the month. BetterCloud, for example, standardized all their accounting processes, resulting in a 4-5 day typical accounting close, supported by two and a half FTEs.
Standardizing how you recognize revenue for various types of contracts allows your Revenue Accounting team to scale, even as volume of contracts and contract modifications increases. Accounting teams often do this by using a revenue recognition solution to set revenue rules and automatically apply standard recognition as contracts are created or modified.
Here Appdynamics offers an excellent case study. They adopted Automated Revenue Recognition in order to automatically recognize complex contracts and professional services revenue, allowing them to close the books faster at the end of the month.
To net it out, fewer days devoted to month-end close means more time those resources can spend on more valuable strategic initiatives. The key to shaving time off this monthly process? Automation and standardization that ensure good quality data.
With Zuora running in the background, we are well-equipped to deliver sustainable value to our customers, based on dynamically evolving offerings that fit the healthcare industry & care providers’ demands.
– Rahma Samow
Head of Siemens Healthineers Digital Health Global