Are You Struggling with Your Financial Close? Discover 5 Key Reasons

July 8, 2024

Despite years of practice and technological advancements, are you finding it challenging to achieve a seamless financial close? You are not alone. According to a recent Gartner survey, many organizations aim for a touchless close by 2025, yet many still need to improve their financial close processes. Let us delve into what might be causing these struggles and how you can overcome them.

 

What is Financial Close?

 

Financial close, also known as ‘closing the books’ or ‘record-to-report (R2R),’ is crucial for every organization. It involves posting transactions, reconciling accounts, and creating and adjusting journal entries to represent the financial position accurately. Additionally, it encompasses financial consolidation for entities with multiple subsidiaries, culminating in producing essential reports for internal and external stakeholders.

 

Why Do Organizations Struggle with Financial Close?

 

1. Failure to Automate Manual Processes: Despite the availability of automation tools, many finance teams still rely heavily on manual processes, leading to longer close cycles and increased errors.

 

2. Organizational Inertia: Resistance to change within organizations often impedes efforts to streamline the financial close process despite the clear benefits of improvement.

 

3. Collaboration and Communication Challenges: Ineffective collaboration between finance teams and other departments, compounded by remote work trends, can lead to delays and inaccuracies in the closing process.

 

4. Lack of Standardization: Undocumented processes and a lack of standardization make it challenging to ensure consistency and accuracy across the financial close cycle, increasing the organization’s risks.

 

5. Integration of Actual and Plan/Forecast Data: Difficulty integrating actual and plan/forecast data for reporting purposes can hinder the efficiency and quality of insights provided during the financial close.

 

6. The Software Conundrum: The complexity of the technology landscape, including various software solutions for financial close, can create barriers to improving the close process.

 

Overcoming Financial Close Challenges

 

While the challenges associated with financial closing may seem daunting, they are manageable. By embracing automation, fostering a culture of change, improving collaboration, standardizing processes, integrating data effectively, and navigating the software landscape strategically, organizations can streamline their financial close processes and reap significant benefits.

 

Ready to optimize your financial close and empower your finance team? Breakaway Technologies is here to help you overcome these challenges and achieve a faster, more efficient close. Contact us today to learn more and take the first step toward financial excellence.

 

Discover how Breakaway Technologies can transform your financial close process. Contact us now for a free consultation!

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