Accounting has been facing new challenges during the past few weeks. Teams were already being asked to do more with either the same number of resources or less, in some cases. Now, as a distributed workforce, their resource-related challenges are being highlighted even more.
This is especially the case as organizations are getting more and more data, which can either bog you down or enable you to drive the business forward. That is if you’re managing your data efficiently.
The key here is to become a lazy accountant. Yes, a lazy accountant.
However, “lazy” accountants are actually far from lazy. Instead, they’re innovative. They find ways to reduce their manual workloads, automate processes, and move on to more valuable tasks.
The key to becoming a lazy accounting is this: posting fewer journal entries.
Journal entries are highly manual in nature and create a lot of unnecessary burden during the close. The starting point to reducing the number of journal entries you post is tracking them.
Here is a five-step process for tracking journal entries and gaining more time back during the close.
Take Inventory of the Current State
You can’t improve what you don’t track. Based on your infrastructure, you can start tracking entries by simply writing them down, copying and pasting them into Excel, querying directly from your ERP, or tracking them in a system.
In the next month, you’ll have a view of your journal entries by business day and an understanding of who is posting what entry on what day. With this visibility, you can start thinking about your journal entries in an entirely new way.
Determine Your Goal
In addition to tracking the number of journal entries each day, it’s important to capture why the journal was posted. Think people, process, or technology.
Then, you and your team can determine which category of journal entry is taking up the most amount of time and which is the most important to streamline. Consult your team to figure out which areas to improve and work as a team to make this a priority.
Measure & Communicate
Based on your goals, track your KPIs and determine any trends. With trends in mind, you can start looking back on the why. Perhaps you purchased another company and that drove up journal entries, or maybe you improved a key process that drove entries down.
Once you determine these trends and reasons, hang it on the wall and show everyone what you’re measuring, why it’s important, and what happened in the business to effect journal entry volume in a particular month.
Improve People, Process & Technology
To improve people, process, and technology-caused journal entries, it’s important to understand why the entry occurred, if there were any mistakes in the process, and what the opportunity is.
People considerations include who is causing a potential error, why, and if it’s recurring. If it is recurring, do we need to consider additional training or are there silos we’re unaware of?
Process considerations include upstream problems that can be fixed, opportunities to stop posting entries below a certain amount, and opportunities to post entries outside of the close.
And finally, system considerations include understanding where your data is coming from and if the system can post directly to your ERP.
Continuously Iterate & Improve
The last step is to continue to iterate and improve. You started with a journal entry process that was manual without tracking and metrics, and now you’ve moved to a process with tracking and metrics. This can lead you to question why journal entries are posted, if some are defects, and whether others can be automated.
Join us for this webinar on Thursday, April 9 to learn more about how to optimize your close process, especially with a remote workforce.