How to transform your financial close

Prophix ImageProphix Jun 19, 2024, 8:00:00 AM

You might be surprised to learn that over half of businesses still rely on manual methods for reconciling accounts.

Account reconciliation is a complex process that’s critical to the success of your financial close.

But if you’re struggling with time-consuming and manual processes, the first step should be to automate and optimize your reconciliation process with dedicated software.

In this article, we’ll outline how account reconciliation supports your financial close, and how a Financial Performance Platform, like Prophix One, can speed up your close processes.

What is financial close?

Financial close is the process of collecting, reconciling, validating, and analyzing transactions from a specific accounting period, which could be the previous month, quarter, or year. The purpose of financial close is to ensure financial activities are accurately recorded and reported, so you can meet your financial obligations, maintain accurate financial records, and align with your organization’s strategic goals.

Financial close involves several other finance activities including account reconciliation, transaction matching, and reporting. Overall, the financial close process helps in maintaining financial integrity, compliance, and informed decision-making.

How does account reconciliation support financial close?

Account reconciliation is a crucial step in the financial close process. It involves comparing your financial records, such as bank statements, with your accounting records to see if they match. The intent of this exercise is to make sure your transactions align (e.g., debits equal credits), and if they don’t, account reconciliation gives you an opportunity to investigate and correct them.

Accurate reconciliation helps improve compliance with accounting standards and regulations, ensuring the reliability of your financial reporting.

How to transform your financial close

A robust account reconciliation process has many benefits that can transform your financial close – let’s dive into them below!

How account reconciliation software can speed up your financial close

Account reconciliation software, like a financial performance platform, can speed up your financial close with several key features designed to meet your needs.

Centralize tracking and visibility

A financial performance platform can centralize all your close processes into a dashboard, which allows you to track relevant transactions and get visibility into the status of ongoing tasks. With a personalized dashboard, it’s easy to identify which close period you’re working on, which entity you’re closing, as well as the specific workflow you’re working from. It can also give you insight into your pending, overdue, and completed tasks.

Global controllers can also use account reconciliation software to view the progress of their financial close by entity, as well as analyze historical trends in past closes.

Get a firsthand look at how to track the status of your close processes by entity with Prophix One Account Reconciliation.

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Automate repetitive close period setup procedures

Workflows in account reconciliation software can automate repetitive setup procedures, by creating a step-by-step approach for month-, quarter-, and year-end closes. Automated workflows can specify who each task is assigned to, including details like notes, commentary, and supporting details. These tasks are also captured and added to your audit log, making it easy to empower your auditors with the information they need.

See how workflows keep the close process on track in Prophix One Account Reconciliation.

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Check for unreconciled amounts

Account reconciliation software has built-in system checks for unreconciled amounts. When uploading supporting items to an account, you are notified of the unreconciled amount before submitting your reconciliation. This feature allows you to capture adjustments and track them separately from your supporting items, giving your approvers full visibility into changes made.

Discover how approvers can track adjustments and unreconciled items in Prophix One Account Reconciliation.

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Add comments and relevant documentation

For approvers, it’s easy to see comments and relevant documents added by your team, improving communication and accountability. When a contributor has an issue with an unreconciled amount, they can add supporting commentary and attachments to their adjustments for review by the approver. Then, approvers can add their own comments and submit the reconciliation on behalf of their colleague, eliminating bottlenecks.

By streamlining these processes, account reconciliation software can significantly reduce the time and effort required to complete your financial close, ensuring accuracy and compliance.

Watch how to track the status of your close process with dashboards in Prophix One, a Financial Performance Platform.

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Account reconciliation with Prophix One™, a Financial Performance Platform

Now that you’re familiar with how account reconciliation software can speed up your financial close, let’s take a closer look at the benefits of Prophix One, a Financial Performance Platform, and its Account Reconciliation application.

Standardized reconciliation process

Prophix One can standardize and map your processes, centralizing them across the organization. With a higher degree of accuracy in your numbers, you can improve your financial reports and make informed decisions. Increased transparency into your account reconciliation process helps you stay on top of tight financial close timelines, with more confidence in your reconciled accounts.

Workflow optimization

Prophix One optimizes workflows by configuring them to your organization’s unique reconciliation process. This creates a standardized workflow for owners to prepare reconciliations, approvers to review and approve them, and accommodate interdependent tasks.

Automated task management assigns deadlines and responsibilities, improving collaboration through real-time updates and commentary. This ensures everyone has access to the details they need for a smooth close process.

Full version control

Prophix One enables you to lock previous financial close periods to secure prior data and force changes to be input into the current period, eliminating the confusion of multiple versions and establishing one version of the truth.

An audit trail tracks all adjustments, and supporting documentation is stored in a centralized location, easily accessible from any device. This ensures everyone involved in the financial close process has the information they need at their fingertips.

Overall, Prophix One Account Reconciliation enhances visibility, informs decision-making, and improves accuracy, collaboration, communication, and data quality, making your financial close a standardized, repeatable process.

Conclusion: Transform your financial close with Prophix One™ for efficiency and accuracy

Transforming your financial close is essential for improving accuracy, efficiency, and compliance. By leveraging account reconciliation software like Prophix One, you can centralize tracking and visibility, automate repetitive tasks, and ensure data integrity.

Prophix One standardizes reconciliation processes, optimizes workflows, and provides full version control, making your financial close a streamlined, repeatable process.

Learn how Prophix One streamlines account reconciliation, empowering you with accurate insights for confident decision-making in our on-demand webinar.

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