Time for a Checklist Tune-Up? Streamline Your Month-End

Pete Archer

Founder / CEO

For every financial control team, the month-end close process is a critical aspect of the job. It's the time guzzler that dictates our overtime and forces us to never take holidays over month end. At the heart of all 12 month-end processes (and for the unfortunate few, 13 close processes) lies your month-end close checklist. This seemingly straightforward document acts as your team's mini GPS navigator, ensuring you stay on course and avoid missing crucial items. But like any map, it needs regular updates to avoid you driving off a cliff.

We champion the concept of all documents being 'living documents' — open to change as you use them. So, your team's checklist may receive small updates throughout the year as you add new processes or systems. However, scheduling an annual, formal review with the entire team is a vital process. Think of it as your annual service to pick up anything big before it causes an accident.

This yearly review should ideally be scheduled for a quiet time in the year, and doesn’t necessarily have to be at the beginning of a financial year (as, let's face it, you will still be busy closing off the last year). It will not be the highlight of your calendar (but is still more fun than having the auditors in), so it's best to schedule it early in the day, with copious amounts of coffee to fuel the team through it.

As you review the month-end close process, consider these crucial questions about each process on your list:

1. Is the task still performed?
It might seem obvious, but running down your month-end close checklist may reveal tasks that your team hasn't actually performed for months. If a task has not been performed for a long period of time and has gone unnoticed, it probably isn’t needed. Tasks may now also be completed as part of another process, meaning they should be merged together rather than split out. Or you can just as easily discover that task descriptions are too generalized and need to be broken down further to reflect the work that is actually being performed. Having the entire team present gets team buy-in to change, and also gets the people who are closest to the work sharing their knowledge of the processes.

2. Does the task have the correct due date?
Deadlines and when data becomes available for the team to use changes over time. A task's due date may have been correct last year, but it might no longer align with current realities. The aim, however, is not to set unachievable targets for the team, but to accurately reflect the timeline that need to be achieved. Realistic timelines mean you will actually know when you are off track with month-end processing as opposed to always being off track as they are unachievable stretch targets.

3. Does the task have the correct level of review?
Not all tasks will actually warrant review. Single actions like locking the AP ledger or sending out email reminders don't benefit from review, and adding an unnecessary layer of review only eats into valuable time or delays other critical tasks. Reserve reviewing for processes involving complex calculations or ledger inputs. Reviews should also be distributed across the team instead of all sitting with the most senior person, this not only spreads the workload but also helps develop your junior staff and ensures the whole team is working on items that are achievable but still involve development opportunities.

4. Is the task description still correct?
Task descriptions should mirror reality. Outdated details like “Send the list to Dan,” even though Dan left the company 2 years ago, are all too common and a sign that the team is not updating the checklist during the year.

5. Is there anything missing from your checklist?
This is the hardest item to work through as identifying something that isn’t present is always harder than adjusting what is already there. To help identify missing items, have your checklist split by sub-areas (e.g., Fixed Assets, Expenses, Revenue) and work through the checklist by area. This structured approach often reveals missed but vital tasks.

When conducting your annual review, keep the below in mind as guiding principles:

1. Hang in there:
Try not to rush the meeting or just give it lip service; consider the end goal of not revisiting this for another year. A comprehensive annual review means you will save time by not need constant check-ins throughout the year.

2. Earlier is better:
Shifting tasks to earlier in the month-end close process grants more time for reviews and focusing on other items that may not be going smoothly. The closer to the ledger-close deadline, the more stressful month-end becomes.

3. More is not necessarily better:
The number of tasks doesn't determine efficiency. Tailor the checklist to reflect your team's workload, systems, and industry. Adding or removing tasks should align with actual work; you are not trying to hit some magical number of tasks.

4. Task descriptions are not procedure documents:
Keep checklist descriptions concise, with the aim of telling people what to do, not how to do it. They should serve as supplementary summaries to procedure documents. Best practice is to attach procedure documents to each task which ensures clarity without overwhelming the checklist.

5. Don't take it personally:
Inquisitive questions during meetings aren't personal. Embrace the curiosity within your finance team, recognizing that not everyone is familiar with their colleagues' processes.

The goal of this annual checklist review is to fine-tune your month-end close process, aligning it with your team's current operations and fostering efficiency. Embrace these questions and principles to streamline your financial control operations.

Remember, this comprehensive review is the roadmap to a smooth ride for the year ahead, making the effort invested entirely worth it.

If you would like to know more about specialised checklist and workflow software designated specifically for finance teams, then reach out to us at easymonthend.com or sign up for a free trial.

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