How to streamline your month-end close process

There’s a reason month-end close is sometimes referred to as the “Month-end Monster.” As a finance professional, you already know the reasons why. Here are just a few of the more dramatic month-end horror stories:

• Working a stretch of 10-12 hour days to individually request expense reporting data from over 50 vendors
• Manually syncing expense data to accounting software which includes downloading expense data, formatting it to match accounting platform requirements, uploading it to accounting software, and sorting through various errors
• Freaking out about whether or not you’re working on the most current data set in Excel
• Finding out about surprise transactions when you’re 99% of the way done closing the books
• Spending an entire weekend adjusting month-end close data to align with management’s expectations

These manual, inefficient processes are not just aggravating – they have massive downstream effects. They slow down reporting, impact cash flow visibility and hinder management’s decision-making ability. 

Finance teams are left with minimal visibility and no control over spending. They use the bulk of their time on these manual closing processes, which wipes out any opportunity for finance to take a strategic advisory role in the business. 

Today, finance leaders are at a crossroads. They can stick with the old, manual processes and experience the same nightmares each month. Or they can use modern tools to revamp the monthly close process – eliminating the month-end time-suck and opening up new avenues for finance as a strategic advisor of the business. 

6 ways to improve the month-end close

1. Map out your current closing process. The best place to start is to get a thorough understanding of your current month-end closing processes. If you’re a small team, these processes might just live in your head. Bigger teams may have documented processes that are accessible on a shared drive.
   Regardless of what you’ve already created, it’s critical to review and understand those processes. So it could be documenting them for the first time, if you haven’t, or reviewing what you have and running it by team members to make sure it’s correct.
   
2. Identify gaps and pain points in current workflows. As you review closing processes, you’re probably well aware of the biggest gaps. These are the most painful parts of closing the books – chasing down receipts, transaction details and expense reports, manual data entry, Excel version control and error research. 
   You’ll need to know what’s working – and what’s not working – about the current month-end close process in order to take steps to improve it. So make sure you’ve got a list of the biggest offenders when it comes to time-sucks and stress-inducing work.
   
3. Create a playbook of checklists and templates. Now that you’ve walked through existing closing processes and you understand the gaps, you’re equipped to improve outcomes. For each workflow related to month-end close, write a checklist. Checklists can range from exactly how to update accruals to who needs to sign off on financial reporting. 
   In addition, you’ll need a set of templates that team members can refer to as they’re working. These could be email templates for requesting receipts or reporting templates for financial data, for example. These templates will eliminate that “starting from scratch” feeling for employees, saving them time and headspace. 
   
4. Prepare as much data as possible ahead of time. A big part of manual month-end closing processes is the data collection process. Whether it’s expense data, accruals or bank card reconciliation, your monthly close will go a lot smoother if you have all the data you need when you start.
   If you enter this data as it comes through rather than waiting until the end of the month, you’ll only need to look for exceptions. That means more instances of data entry throughout your regular workday as opposed to batching it all at the end. 
   
5. Evaluate automation and AI to speed up processes. With the steps mentioned above, you’ve already impacted the finance team in a positive way. You can go further and evaluate tools that could take human work and transfer it to machines. 
   Automation can run pre-programmed workflows that eliminate the receipt chase, among other things. AI can greatly increase accuracy by using machine learning to verify receipt details. Look for platforms that solve for the biggest pain points you identified in your gap analysis. 
   
6. Re-evaluate on a regular basis. Even though you’ve made changes, your work isn’t over yet. Observe how your new closing processes are working on the next few cycles. What’s your own experience, and what are you hearing from employees? 
   Sometimes when you solve one big problem, another underlying problem crops up. It’s important to pay attention as you implement new processes so you can flag anything that needs work.

Automation & AI to the rescue

If you want to overhaul your month-end close for speed and efficiency, automation and AI are your most impactful tools. The PEX expense management platform leverages both to make expense reporting quicker and easier – for employees and finance staff.

Eliminate manual chasing & data entry

PEX provides multiple ways for employees to digitally submit receipts, including email, text and upload via the PEX mobile app. The platform then leverages AI-based receipt matching to verify that card transaction details match up to the employee’s receipt. 

Our Auto Tagger automation allows finance teams to pre-program a GL code-to-merchant mapping, so the GL code auto-populates for each transaction. And if employees are out of compliance with expense policies, Auto Enforcer blocks card usage until they submit all necessary receipts and transaction details.

Lose the time-consuming data uploads

PEX provides pre-built integrations with accounting platforms like QuickBooks, NetSuite, Sage Intacct and CMiC. These integrations have mapped out expense reporting data from PEX to each matching field in the accounting platform. Customers can auto-sync or manually sync data from PEX to their accounting software with minimal setup and maintenance. 

Forget spending surprises

Our prepaid, virtual and corporate card options all come with custom spend rules that enable finance staff to map expense policies to card usage. Finance teams can restrict spending by merchant, location, cardholder group and even day and time. If an employee needs to spend outside this framework, they can make their request via the PEX platform. And automated approval workflows allow finance teams to program multiple levels of expense approval. 

No more inaccurate management expectations

The PEX platform updates in real time, so all parties can view transactions as they happen. Instead of waiting for month-end close data, management can see real-time spending in either the PEX platform or the corresponding accounting software. With a current view of spending, stakeholders can set accurate expectations for budgeting and investments – and pivot when necessary. 

Imagine a faster, stress-free closing with PEX

At PEX, we’ve helped hundreds of customers make their dreams of a streamlined, month-end close a reality. Here are just a few examples of the impact our our automation and AI workflows:

• By transferring the manual work of chasing receipts and entering GL codes to PEX’s automations, Southwestern Healthcare saved 10 hours per month. 
• Family in Christ Community Church reduced their monthly reconciliation time from 5 hours to 20 minutes – making reconciliation 97% more efficient.
• Skeehan & Young saved 8+ hours per month per client on their monthly close, for all of their clients that use the PEX platform. 
• By leveraging PEX’s integration with their accounting partner, Greenslate, Wheelhouse Group saved 4 hours per month. 

Are you curious how much faster your month-end close can be? Book a custom demo of PEX’s expense management platform today to learn more.