Process Vs Control in the Month End Checklist and Reconciliation Audit

Month end closing is a vital process that ensures reported cash levels, transactions, and budgets are recorded accurately. Without an effective closing process in place, finance teams often struggle to complete their tasks on time.

Utilizing documentation and automation software provides greater transparency into financial activity, helping prevent bottlenecks from occurring and shorten the time required to close.

Process vs. Control
Every company has a distinct month-end closing process tailored to its business needs, but all processes benefit from best practices such as documenting steps, creating checklists, assigning roles and setting deadlines for tasks. Implementing such structures allows teams to achieve uniformity while quickly identifying errors quickly for effective monthly success. AP automation software or accounting software with procure-to-pay capabilities also make tracking spending and closing books on time much simpler ensuring all processes are complete and audit ready.

Maintaining accurate records can also prevent future reopening to correct issues that have been overlooked or misplaced.

Reconciliation
Reconciliation is the practice of checking that all aspects of your accounting records match with external accounts such as bank statements. This includes revenue, expenses, investments, assets and equity.

Reconciling your company’s books is an integral component of tax, audit and financial reporting, with accurate reports impacting decisions made by top management as well as creditors, investors and analysts.

Reconciling can be a tedious and time-consuming task that requires hours of manual work to accomplish successfully. Without an effective reconciliation process in place, errors will inevitably arise: duplicate entries, omissions or missing data could all occur as a result of failing to follow established protocols for reconciliation. Automating this process through data automation tools will lighten your teams’ workload while decreasing manual errors significantly.

Post-Closure Meetings
Closing the books involves multiple steps. This may include comparing sets of data, conducting account analyses and reviewing documents pertaining to the period being closed out. Such reviews help verify that journal entries have been recorded accurately while making sure all necessary activities have been included as part of this closing process.

Once all the data has been compiled and reviewed, it can be used to generate internal financial statements. This step is crucial since any errors in reports could damage a company’s performance and liquidity; they could result from duplicate entries, omissions, or fraud – therefore having a month-end close checklist helps minimize these instances of error.

Companies can improve their month-end close process by creating a thorough and optimized plan, using interactive checklists and workflow tools, and taking advantage of automation whenever possible. Ultimately, businesses aim for an accurate and timely financial statement release to maintain positive cash flow, make strategic business decisions efficiently and measure progress toward long-term goals.

Automation
A month end checklist is an integral component of optimizing the accounting close process, providing systematic management of its many complex and interdependent tasks. Large companies with global workforces and multiple locations face particular difficulty when it comes to coordinating month-end closing activities across their enterprise; complex deadlines only compound this difficulty further.

Managers of finance and accounting professionals may find the month-end close process challenging. Due to its intricate details and volume, accounting close can easily cause teams to miss deadlines, work with incomplete or inaccurate data and lose track of critical tasks.

Automation makes the month-end close process simpler for accounting teams, helping them to achieve high levels of success month after month. Not only does automation create documented systems but it streamlines data collection, reduces manual and outside-of-system processes, simplifies reconciliation processes and lowers risks while increasing accuracy in reporting.