It’s the crucial — but unsung — process every construction firm endures at the end of every month, quarter, and year. From adjustments to the general ledger and audits to reconciliations and financial statements, the period close — “Closing Time” — is too often a time- and labor-intensive cycle that is both mundane and essential for construction finance teams.
For a growing number of firms, the overarching challenge is to cut the time required to close the books. Construction companies need faster closes so that finance can move on from tactical and clerical tasks to higher-value, higher-impact strategic activities that help the organization capitalize on opportunities, respond to threats, and create greater agility. Enter the continuous close.
What is the Continuous Close – and How Can You Make It Happen?
The continuous close allows you to perform month-end closing processes throughout the month rather than saving them all for a frenetic month-end. This approach captures data in real time, enables continuous reconciliations, and allows you to make adjustments on the fly. The continuous close gives you a clear and accurate picture of your financial numbers at any given time—without going through period-end closing procedures. Here are the three keys to making it happen:
- Leverage Automation to Save Time and Reduce Stress.
It’s no secret, today’s finance teams are working longer and harder and are under pressure to accomplish more in less time. To help save time and reduce your month-end stress, the first thing you should consider is automating your key accounting processes.
Automation eliminates manual, time-consuming processes that drain your productivity. It eliminates error-prone spreadsheets, broken formulas, and chasing emails. Plus, automation keeps your team happy by freeing up time for them to focus on the strategic side of finance and feel the satisfaction of adding greater value to your company.
- Turn to AI to Increase Speed and Accuracy.
AI is an instrumental tool for finance teams working to close the books faster and more efficiently. It not only has the ability to check large volumes of data for accuracy, but it can also learn from data and generate valuable insights. And since AI captures data in real time, you operate with real-time visibility into key metrics and outcomes, so your organization can identify opportunities for growth.
In particular, early AI adopters are using AI for repetitive, manual tasks such data entry, reconciliations, and exception management, which are normally time-consuming and error-prone. Since AI performs these tasks with greater speed and accuracy than humans, it makes sense they are an early target for the application of AI in accounting.
- Invest in Required Resources.
Completing a close requires the coordination and execution of a series of processes. Some of these processes may be inefficient and need to be automated while others could be redundant and need to be eliminated. To achieve a more efficient and faster close, just like any other process needs to be streamlined, it is important to identify which areas need improvement and what resources are required to make those improvements.
Investing in the right resources is critical to achieving your desired outcomes. The top areas you should consider investing in are new technology, additional headcount, and/or resource time to evaluate and improve close processes.
Final Thoughts
The continuous close provides greater insights and value. By reducing or eliminating time-consuming, manual processes, a continuous close frees finance teams to devote more time to strategic finance, not tactical finance. The possibilities it delivers are transforming construction accounting.