Frustrated with the inefficiencies of your month-end close? Looking to be audit-ready every month of the year? Our mortgage banking accounting expert Susan Volpe shares her 10 Best Practices to Improve Your Month-End Close:
- Increase Mid-Month Activities/Daily/Weekly
- Reconcile LHFS
- Reconcile WH & Escrow – weekly
- Reconcile cash
- Reconcile CC
- Understand the Activities
- Typically, financial activities are either transactional or rules-based
- Understanding the kinds of transactions you are dealing with can help you understand whether to automate them
- Standardize Your Documentation
- Standardize repeat reconciliations, allocation, JE
- Payroll – mapping GL Mapping from your payroll
- LOS reports – first payments, commission loan level reports
- Build Bridges Outside the Accounting Department
- Vendor invoices – reach out get invoices
- Closing department – PA
- Cross-train Key Tasks
- Allows close activities to continue even when a team member is out of the office
- Cross-training also fosters a more collaborative and flexible working environment
- Embrace Automation
- Automation is your best friend
- The more you can automate, the faster your closing will become
- Improve Processes
- Process improvement takes time and is a continuous practice
- Making changes piece by piece may not produce dramatic improvements overnight, but it will allow you to evaluate each step and course-correct when needed, which will likely yield greater benefits in the long run.
- For example, start out by updating close-related tasks such as journal entries and then move onto more complex procedures. Track how long each task requires and record any shifts as you go.
- Prepare a Detail Close Schedule
- Assign the appropriate person to complete the task
- Create a deadline for each task
- Set Realistic Expectations
- Don’t allow you and your team to become overwhelmed
- If your closing is now the 20th, jumping to the 5th may not be realistic.
- Baby step it
- Make it a Team Effort
- Empower your employees to take ownership and make suggestions
- Push team members to take a personal stake in improving close procedures that is reflective of their role in the organization
- Empower your employees to optimize their workflows in a way that works best for them
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