The Headache of Month-End Reporting

November 8, 2021

The Headache of Month-End Reporting

This blog post is brought to you by Jana Kovacovska, the founder of Tiny CFO.

When companies hire their first CFOs, “implementing a smooth month-end process” is often among the first things on the “what the job entails” list. The goal is to make this process as streamlined and reliable as possible. And it makes sense – without a reasonably solid month-end process, it’s likely you won’t have a good understanding of your financial performance as you go, resulting in a big surprise at year-end, when annual accounts are submitted. (Good or bad, in finance, we don’t like surprises – but the bad ones tend to be especially unpleasant.)

But perhaps you’re wondering, what actually is a month-end – and why does it matter?

In the simplest terms, it’s just about making sure that whatever happened last month is accurately recorded and understood as soon as that month is over. Whether that’s revenue (including revenue earned but not yet collected or even invoiced), costs, changes in inventory, or whatever else you have going on, you want to be on top of it. Transactions should be reconciled, bills paid, invoices sent out, monthly management accounts produced together with smart insights on what’s going on in the business.

The timeline is everything as the sooner you have month-end done, the sooner you understand your business results for that month. In other words, closing September books in the first week of October – and maybe knowing that your profit margin slipped, or that cash position got a lot worse than expected – is substantially more helpful than doing so in November. When you get this info on time, you can course-correct quickly – perhaps review how many discounts you’re giving out still in October and get that profit margin back on track, or make sure that someone calls all the customers with overdue invoices asap to improve the cash position (how much money is sitting in the bank). Makes sense, right?

Sure, but there is a catch. In probably every company, there are elements of month-end that are done manually: whether it’s sending out the invoices, or putting all key performance indicators in one report, or any number of other things; usually, whatever is manual drives the delay between when you need the info, and when you actually get it. Not to mention all the extra costs and mistakes this leads to – having a team member copy and paste data all day is as dispiriting as it is expensive and error-prone.

Therefore, automating whatever can be automated is always a good idea. LiveFlow can help with populating month-end Google Sheets reports with the right info from Quickbooks; other tools help with invoicing, foreign currency reconciliations, expenses, and just about every aspect of ongoing finance operations.

The right “finance stack” can be the difference between closing your September books on October 10 versus on November 10 – not to mention the headache it saves in the process. So do yourself a favour and automate.

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