Week of Feb 6, 2017: Close your books quicker - Part 1
Over the next couple of weeks I will be sharing some tips and tools I have found useful in speeding up your period end processes.
Part 1: Reconciling your accounts
Regardless of the accounting software used, one of the largest month end / period end "choke points" I have seen is in the area on bank reconciliations. Many companies only reconcile their accounts once a month when the statement comes in. Hopefully this is not the only time you are reviewing your accounts! Depending on how many accounts and how much activity your company has in each account; the monthly reconciliation process can take hours or sometimes an entire day.
While it is good if you are reviewing your account activity daily or weekly, you are wasting your time by only reviewing the activity. Why not take a little extra time to reconcile your account when you are reviewing the daily / weekly activity. By doing this, you are now achieving two goals with the same step: 1) You are reviewing your accounts for unusual activity or to see if expected activity has cleared & 2) You are cutting down on the time spent doing reconciliations at the end of the month.
Overall you spend about the same total time reconciling each month doing your reconciliations daily. However, your time is now spread throughout the versus being concentrated all at once when all the other closing processes have to be performed as well.
Key Takeaway: Reconcile your accounts at least weekly if not daily