Top Signs Your Financial Close Process Is Broken

Closing the financial books doesn’t have to be a time-consuming, error-prone task. With the right tools and strategies, you can transform your financial close process into an efficient, streamlined operation. Let’s explore common signs of a broken financial close and how Oracle NetSuite can provide the solutions your business needs to close with confidence.  

Is your Financial Close broken?  

Financial close is a much-dreaded activity for accountants across any organization. Balancing accounts, paying bills, reviewing invoices, and posting adjustments toward the end of a reporting period all require precision and attention to detail.  

When these tasks aren’t managed effectively, the accuracy of monthly, quarterly, or yearly reports is compromised. Without the right tools, accounting departments struggle—and your financial close may be broken without you even realizing it.  

Here are the top 5 signs of a broken financial close:  

Zero documentation:  

A well-documented financial close process is essential for success. Organizations with a winning streak usually have a well-defined roadmap of steps and processes to be performed in place to close their books on time. If your organization lacks proper documentation, you’re likely to experience inefficiencies and errors in your performance. 

Companies that run without solid documentation of the financial close are likely to encounter a series of challenges in the long run like missed steps, confusion, and the inability to standardize processes. This might ultimately impact performance.

Absence of automation:  

Manual accounting processes are notorious for being error-prone and time-consuming. While advanced computational tools have revolutionized accounting, many organizations still rely on manual efforts to close their books even in the 21st century, leading to prolonged time consumption and errors.  

Without automation, businesses face significant delays in generating reports, leading to poor decision-making and missed opportunities. Automating financial close tasks like reconciliations, revenue recognition, and adjustments reduces both the time and errors associated with manual processes. 

Confidence in spreadsheets:  

Spreadsheets are helpful tools, but they’re no substitute for a comprehensive accounting solution as their benefits are limited. Relying on spreadsheets for key tasks like amortization, revenue tracking, and depreciation creates unnecessary risks and delays.

Spreadsheets are prone to critical data errors, especially when shared across teams. If an error occurs, it can be difficult, if not impossible, to track who made the changes or when. The lack of accountability can lead to costly mistakes during financial close.  

Distributed data:  

The accounting team rely on data from multiple sources within the organization, such as sales teams, operations, and project management, to prepare accurate financial statements. They need to be constantly in the loop to approve or plan for upcoming expenses or track the current payment status for the balance sheet. Without real-time access to this information, accountants waste valuable time chasing down data, leading to significant delays in closing.  

A centralized data center can help, but many organizations still depend on multiple applications like CRM systems or project management systems. Compiling data from these different sources and migrating it to a general ledger is a difficult process, particularly for businesses with multiple subsidiaries, each using its own standalone systems. Migrating data from one system to another also increases the chance of errors and requires the assistance of a technical expert.   

Lack of control:  

A lack of control over the financial close process is likely to have a broken financial close and can result in compliance issues and internal fraud. Companies that don’t follow standardized accounting procedures risk creating inaccurate financial statements, which can lead to governance problems. 

When you have a predefined structure for approvals and purchase requests, it will help account managers to standardize the process and create financial statements with integrity.   

How can Oracle NetSuite Help?  

Oracle NetSuite is a leading cloud solutions provider with a presence across 20+ industries. Easily automate your financial close process with NetSuite software and put an end to reliance on spreadsheets. NetSuite helps accountants with a series of complex processes like revenue recognition, depreciation, and amortization leaving no room for error.   

NetSuite’s governance, risk, and compliance capabilities help companies achieve their risk management objectives with built-in processes and automated controls designed to address the increasing complexity of regulatory, operational, and industry requirements.  

NetSuite acts as a single source of data from which you can manage and access all areas of your business, including accounting, sales, and shipping. This eliminates the challenges that accountants face while compiling data from different sources as NetSuite easily collects data from all departments without delays or errors. NetSuite thus ensures a smooth closing and helps organizations make better decisions.  

Wrapping Up 

If your financial close process is inefficient, prone to errors, or overly reliant on manual processes, it’s time for a change. Oracle NetSuite can help automate and streamline your financial close, ensuring your business stays compliant and operates with maximum efficiency. 

Ready to transform your financial close process? Connect with Jobin & Jismi’s certified NetSuite experts today. We’re here to help you implement NetSuite’s powerful financial management tools, ensuring your close is accurate, fast, and fully compliant.