Strategies for effectively managing year-end close.

How to successfully plan and execute this business-critical process.

Year-end close occurs annually for businesses across the nation and marks a precise end to the past year's financial activities. During this time, companies are responsible for sealing their records and handing off a complete and accurate review of their financial performance. Completing the year-end close successfully usually includes very arduous processes that often mean late hours for key accounting and finance staff. The crunch time leading up to the year-end close can be stressful and hectic for all internal stakeholders, but employers can take steps to effectively manage this annual process.

Year-end is a year-long process.
As a result of the current regulatory environment, financial reporting and analysis have been scrutinized in board rooms, offices and cubicles around the country. Companies have been forced to employ rigorous internal controls to feed comprehensive, timely and accurate reporting. Producing these metrics is increasingly vital to conducting not only compliant, but efficient operations. As such, monthly and quarterly reports are now reviewed as vigorously as year-end financial records.

Although this scrutiny on monthly and quarterly reporting can cost employers additional time and money, there are very real benefits in relation to executing year-end close. Often, much of the year-end processing is spent cleaning up errors and re-checking monthly reports. However, if companies are more thorough with this process throughout the year, they will find less to clean up at year-end close. More time can be spent on general analysis and “business-as-usual” tasks if data integrity and reporting standards are more closely aligned with an organization's standard operating procedures.

Plan ahead.
Finance and accounting professionals must constantly be mindful of the year-end. Unlike audits, year-end close is never a surprise. The date is established and circulated far in advance of the process, providing no excuse for companies who have not planned appropriately. With this in mind, companies can strategically plan and work towards a more seamless and efficient close process beginning as early as the first day of the new year. Creating a detailed, well-designed plan that can be circulated far in advance of deadlines is a great way to engage and prepare employees.

Have your accounting staff order and review relevant documentation as early as possible. Given that regulatory changes can occur each year, keeping up to speed on these updates in a timely matter allows companies to be proactive and prepared with the right information. Accurate and complete employee data is also vital to a successful close. Be sure to consistently review staff information to ensure the necessary data has been collected and entered correctly in online systems and databases. This will simplify the production of key payroll and employment tax reports.

Staffing for success.
Since year-end only occurs once a year, it does not fall within the “business as usual” bucket. Consequently, during this time there is a need for additional resources to step in and assist while simultaneously managing everyday responsibilities and tasks that are also critical to the business.

Knowing the risks and challenges associated with this balancing act, managers must be sure to remind employees of their function in the year-end close process as early as possible. Ensure you have scheduled adequate time and resources to meet deadlines and create contingency plans to prepare for unexpected occurrences. Some additional valuable tips include:

• Have experienced staff provide training and guidance to new and/or temporary staff. The individuals who have gone through the process before can be invaluable resources to those who are new.
• Reward employees that go above and beyond the call of duty during this time period. Consider giving these individuals well-deserved perks which can serve to boost morale and re-invigorate their efforts.
• Keeping staff happy and expressing your appreciation for their hard work is key to managing your human capital effectively. A company-wide event or complimentary vacation day can also be a great way to thank staff for the efforts and keep people on board year-over-year.