Sage shared results from its annual Close the Books Survey. The leader in accounting, financial HR, and payroll technology for small and mid-sized businesses (SMBs) based the survey on a poll of more than 1,400 finance and accounting professionals across 60+ industries. Results reveal that 93% of respondents are under pressure to close the books faster. More than 60% say accelerating the closing process would allow them more time for data analysis to uncover insights or trends.
The unprecedented global events of the past few years have created a rapidly changing business environment. These developments have also created unique opportunities for innovation. Finance teams are looking for new ways to be more agile in order to monitor these constant changes and to ensure ongoing success for their businesses. Manual financial close processes, often the norm with on-premises accounting software, can negatively impact agility in several ways – including consuming time and slowing access to the real-time financial and operational information needed to make strategic business decisions.
Insights gathered from data in the survey results uncovered three key strategies for organizations to achieve a faster close:
- Automate key accounting processes to help save time and reduce stress. 60% of respondents say they “absolutely or strongly agree” that automation saves time at the month’s end. Automation eliminates manual, time-consuming processes and helps eliminate spreadsheets which are prone to errors. The top processes surveyed companies are choosing to automate include the proactive search for anomalies or errors, daily bank reconciliations, and bank or credit card feeds. They ranked the highest time savers to be templates for journal entries and prebuilt dashboards and reports.
Larger companies reported having automated processes 40% more than smaller companies. That automation allows them to close their books 15% faster than smaller organizations – even though larger organizations often need to handle complex accounting issues like intercompany transactions and foreign currency translations. On average larger company financial teams say they have 22% more time to analyze data.
- Leverage artificial intelligence (AI) functionality that is purpose built and embedded in your organization’s accounting software. AI gives organizations the ability to check large volumes of data for accuracy in minutes and learn from that data to provide valuable insight. This will increase the speed and accuracy of the close. While AI is still in the process of moving into mainstream, according to the survey, 21% of larger companies are already onboard with AI and seeing its advantages.
- Invest in a faster close by adding new technology, additional headcount, or dedicating resource time to evaluate and improve the monthly close process. To achieve a more efficient and faster close, just like any other process or series of processes that need to be streamlined, businesses should invest in any or all of these areas. 40% of respondents to the survey said they have adopted new technology this year to help with the close process – nearly double the number from last year.
“It’s important for accounting software vendors to help businesses streamline processes and knock down the barriers to their success,” said Aziz Benmalek, President, Sage North America. “Sage continues to embed advanced functionality, such as AI and Machine Learning, into our solutions to increase automation, drive efficiency, and free up finance teams to spend more time adapting to change. The less time businesses spend closing the books, the more time they have available to analyze the results and make strategic decisions to drive growth.”
Continued Movement to the Cloud
The expansion of the work-from-home model and the ongoing trend of digital transformation is driving a big shift to cloud accounting. This year, 87% of businesses reported having a cloud-based or hybrid accounting solution. This represents a 50% increase from last year’s survey. Of those using a hybrid or on-premises solution, half plan on moving to a fully cloud-based solution within the next two years.
Survey results found high adoption of cloud accounting software across organizations of all sizes because it offers many benefits over spreadsheets and legacy on-premises accounting systems. This move towards that software has provided more businesses with automation of key processes, seamless integration with other key business systems, access to date anywhere/anytime, and the agility needed to scale as they grow.
To see the full results, download a complimentary copy of the 2022 Close the Books Survey report.
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