Month end close is a pain point shared by finance teams and accountants worldwide. We need to accept that while the process will never be fun, it can be smooth and painless with the right tools. The first tool that is essential and yet often overlooked is the month end close checklist.
Whether you're following IFRS, US GAAP, FRC, NZ IFRS, APSE, JGAAP, or some other acronym that your regulator has created, the below eight items are essential elements to ensure that your checklist works for you to create an easier month end close process.
1. What is each task's due date?
Fuzzy deadlines are frustrating to all involved. An efficient month end close checklist must include clear due dates for each task. Whether the task is due based on the workdayfor that month or a fixed date each month, you and your team need the ability to confidently plan ahead and ensure that everything gets done on time. You can even add extra elements such as when the task should be started to further assist the newer members of your team.
2. Who is preparing and reviewing the task?
Assigning responsibilities is essential; month end tasks with no clear owner are destined to never get done. It is also crucial for assessing workload management among the team and avoiding bottlenecks and burnout.
3. Signoffs are a must.
Tracking the progress towards month end close is like having a mini party for each task. Not only does it help you monitor progress, but it also lets you spot any unexpected delays. By keeping an eye on these dates, you'll have a better grasp of how your team is tracking against the plan and allow you to adjust future month end closes to try and make each month end more efficient than the last.
4. Comments
Ideas should never be kept in silos; they need to be shared. All months end close checklists must include a comments section. They encourage collaboration and allow your team to raise any issues or suggestions at the time they think of them, enabling future improvements and efficiencies. The best way to make your month end close efficient is to learn from previous month ends and capture data as it comes to the team.
5. Customisation
No two organizations are the same, and neither should month end close checklists. Customise your month end close checklist by adding not only the companies that each task relates to (if you manage more than one company), but also by including sub-areas that allow you to track the month end close process the way you want to. For example, you can split your month end by different areas of the Profit and Loss, Balance Sheet, or by the nature of the task. The way in which your team manages a month end close process is unique, and your checklist should reflect this.
6. Simplicity is Key
As accountants, we all love a good Excel spreadsheet, we even take pride in complex formulas or macros (VBA) enhanced workbooks. However, for your month end close checklist, the simpler the better. It needs to be used by everyone on your team, not just the Excel gurus. Designing something too complex increases the chances of it breaking and creating more work. So, while a macro-enabled Excel checklist for month end close may tempt you, keeping it straightforward ensures that your entire team can navigate it effortlessly.
7. Sharing is caring when it comes to location.
A month end close checklist is only useful when it is accessible by everyone (no desktops versions allowed). Store it in a central location that's easily accessible to all team members. Whether it's a shared drive, a cloud-based storage system, or a dedicated tool (like easymonthend.com), make sure everyone can find it without hunting down ancient scrolls. This way, you'll foster knowledge sharing, collaboration, and a unified approach to your month end close.
8. Continuous review
The work a finance team is expected to do is never static. This means that your team's month end close checklist also cannot be set-and-forget. The tasks need to be reviewed on a regular basis to see if they are still relevant. Can their due dates be moved to relieve pressure on the team? Do new tasks need to be added? Your month end close checklist needs to remain relevant if you want an simple and easy month end close.
Pete Archer
