Common Financial Close Mistakes & How NetSuite Helps Overcome Them
Financial closes are a critical yet complex task for any organization — and without the right oversight, any number of costly issues can arise: delays in reporting, inaccurate financial information that affects your relationships with auditors and stakeholders, and a failure to comply with laws and regulations, to name but a few.
For best results, it’s essential to integrate a cloud-based system like NetSuite to provide more real-time visibility, mitigate issues before they occur, and establish a smooth, reliable and effective financial close process.
What is a financial close?
A financial close is the process of compiling and finalizing the financial activities and transactions of an organization over a specific period of time, such as on a monthly, quarterly or yearly cadence.
To ensure reliability, accuracy and completeness of financial records, there are many different types of bookkeeping and accounting tasks that need to be conducted (such as reconciliation, financial statement preparation, audit preparation, documentation, data analysis and review, and more).
Why is having a streamlined financial close process important?
Having a streamlined financial close process helps improve the overall financial management of an organization, drives strategic decision making, mitigates risk, and promotes transparency and accountability for your customers, clients and/or other stakeholders.
The Top 5 Most Common Financial Close Mistakes and How NetSuite Helps Overcome Them
- Disorganized financial close process
- Failing to use automation during the financial close process
- Inability to access the right data during the financial close process
- Failing to provide their team with adequate time to conduct financial close procedures
- Disjointed financial data
1. Disorganized financial close process
Oftentimes, organizations fail to integrate practices that make the financial close process flow more smoothly, leading to company-wide disorganization, a higher potential for errors to occur, delays in reporting, increased costs due to duplicate efforts and many other costly setbacks.
Failing to have standardized processes and procedures for financial closes can make it difficult to align and organize financial information efficiently.
Plus, without having the proper documentation procedures in place from the get-go, it becomes challenging to verify and reconcile financial transactions, causing even more delays, errors and disorganization.
How NetSuite helps overcome financial close disorganization
NetSuite offers several solutions to help organizations streamline their financial close process and address disorganization more effectively.
By providing a centralized hub for all data, eliminating manual tasks, enhancing communication and more, organizations can obtain an organized and effective financial close process.
NetSuite features and functionalities to organize the financial close process:
- Data Centralization: NetSuite offers a centralized platform where all financial data (including general ledger, AP/AR and more) can be securely stored under one roof. Having all data under one comprehensive platform eliminates the need for manual data gathering and consolidation, helping reduce the chance for errors and disorganization to arise.
- Real-time Visibility: With NetSuite’s real-time dashboards and reporting capabilities, users can monitor the financial close process at any time. This way, everyone on your team will have a solid understanding of the tasks they need to achieve, minimizing confusion, enhancing accountability and setting up solid procedures for progress tracking.
- Streamlined Communication & Collaboration: NetSuite also offers tools to help your team communicate and collaborate more effectively, share documents and work more efficiently during the financial close process. This reduces the potential for miscommunication to occur or information to be lost as a result of disorganization.
2. Failing to use automation during the financial close process
When there’s an excess number of manual tasks your organization must conduct during the financial close process, there’s also an increased risk for errors and timeline delays to occur.
For example, relying on manual entry and using multiple systems or spreadsheets to record and track financial transactions can create confusion during financial close season, leading to miscalculations, data entry mistakes and many other costly setbacks that can greatly impact your relationships with stakeholders.
How NetSuite automation helps streamline the financial close process
NetSuite automation plays an essential role in establishing an effective financial close process by increasing efficiency, improving accuracy, establishing control and compliance procedures, providing real-time insights and ensuring audit readiness.
When your team can cut back on the number of manual tasks they have to conduct, there’s a significant reduction in disorganization, miscommunication, errors and other risks to arise.
Plus, with financial close process automation, your people will have more time to focus on strategic goal setting and actualization, helping drive your company into the future and setting the stage for future growth and scale.
NetSuite automation tools to enhance the financial close process:
- Expense tracking
- Reconciliation
- Intercompany elimination
- Accruals & deferrals
- Workflows & dashboards
- Documentation & record keeping
3. Inability to access the right data during the financial close process
Accountants and financial experts need reliable access to transactional data in order to drive financial close success – but all too often, organizations fail to keep data centralized and secure.
Without having uninterrupted access to this information – and ensuring the information in question is reliable and trustworthy – you simply won’t be able to ensure accuracy in your financial reports, audit procedures and other financial close endeavors.
How NetSuite helps with providing access to the right data
NetSuite acts as a centralized data repository for all the information needed during financial close season, keeping data not only available but also secure.
NetSuite’s cloud-based accessibility means users can access the system at any time – even from their mobile phones. Plus, with real-time data updates provided by NetSuite, you can ensure the information you’re working with is always current and up to date.
In addition, as transactions occur, the system automatically updates relevant financial data, helping to streamline the financial close process even more (but only if you’ve set up the right automation procedures, that is).
4. Failing to provide their team with adequate time to conduct financial close procedures
Scrambling to check things off your list during financial close season can lead to errors, miscalculations and other costly setbacks.
However, the faster the financial close process can be completed, the faster you can take the next step, whether that’s conducting FP&A to drive strategic growth, developing reports for investors or stakeholders, or other essential duties – but that doesn’t mean this process should be rushed.
For best results, it’s essential to set up the right financial processes and procedures to ensure everyone on your team understands what they need to do (and can do so well ahead of deadline).
How NetSuite helps reduce rushing to meet deadlines during the financial close process
With proprietary tools for automation and more, NetSuite helps businesses save time and get ahead of issues before they arise, reducing the potential for decisions to be made on the fly.
NetSuite also has options for workflow customizations that work specifically for your needs and goals, tools for collaboration and communication, seamless data and document-sharing methods, and many other helpful solutions that will provide more real-time visibility, mitigate risks and streamline your financial close process.
5. Disjointed financial data
If your organization employs the use of multiple unintegrated systems to compile financial close information, your team is faced with conducting these processes manually, leading to costly setbacks, mistakes and confusion.
Disjointed or fragmented data can also lead to errors with reconciliation and validation that take even more time to remedy – and as auditors need easy access to reliable financial data, they may find it impossible to verify information, conduct the proper testing and ensure your financial statements are accurate.
In addition, there is also an increased potential for data loss and security breaches, as when your financial data is scattered across multiple systems, there are more points of entry a malicious attacker can utilize to cause harm to your business.
How NetSuite helps overcome disjointed data during the financial close process
NetSuite integrates with banks, payment gateways and other third-party solutions to keep data under one roof, establish a seamless flow of information and eliminate manual data transfers.
In addition, NetSuite offers data encryption and protection, role-based security controls, multi-factor authentication, audit trail and activity monitoring, data privacy controls and many other helpful solutions that help safeguard your organization from risk.
Final Thoughts on How NetSuite Helps Overcome Financial Close Mistakes
There are many different tools and methodologies your organization can implement to overcome financial close mistakes and ensure a smoother process – however, identifying the right NetSuite configuration that works specifically for your unique company needs and integrating it with little interruption to operations is no easy feat.
For best results, it can be beneficial to turn to a skilled NetSuite implementation consultant for guidance.
Ready to find the perfect FiT?
At Bridgepoint Consulting, our finance gurus and certified NetSuite consultants combine financial expertise and technical know-how to deliver scalable solutions that accelerate your growth forward – no matter what your goals or needs might look like.
Contact us today or learn more about how we can help at the link below.
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