Accounting is the job that’s never finished. As a small business owner this means preparing tax returns, reporting financial data, and performing month-end closings. Most companies require month-end closings to ensure accurate financial records are kept throughout the year.
Month-end closings finalize a business’ financials during a given month using accounting procedures to review, record, and reconcile accounts. Reconciliation compares transactions to supporting documentation – noting any discrepancies between the two. The purpose of reconciliation is to ensure financial records are valid and accurate. Unauthorized transactions can be reviewed and resolved.
Performing month-end closings builds confidence in an organization’s financials by ensuring data is reliable and accurate. Business and franchise owners can use month-end closing reports to manage organizational spending. However, month-end closings can take up to 15 days after month-end to complete – making data less useful for future financial decisions.
Why is Month-End Closing Difficult?
Month-end closings can be challenging as accountants have to retrieve, analyze, and reconcile data from different sources. Accountants spend a lot of time manually obtaining bank information and verifying each transaction. According to a survey conducted by SAP and Deloitte, the most common barriers to earlier month-end closings are internal levels of review (40%), consolidation of details for financial statements (35%), and time spent checking for errors (20%). The reconciliation and month-end closing process can be tedious and manually intensive.
Let’s say you’re an accountant handling reconciliations for a local hotel. First, you have to get your company’s bank statements for the previous month – which isn’t available until the month is over. Then, you have to track down receipts for each transaction. However, after obtaining receipts you notice they don’t match the banking records. So now you’re on the phone with managers and employees trying to figure out why there are discrepancies. Suddenly you’ve just spent several hours verifying a single bank transaction. After days of performing reconciliations, you finally finish month-end closings. However, the data is now 15 days old and you’re already halfway through the next month. You wonder if there is a way to make the month-end closing process easier. That’s when you discover Docyt.
Docyt’s accounting automation software can simplify month-end closings by using continuous bank reconciliation.
Docyt Improves the Experience
Docyt’s software automates bank reconciliation to make month-end book closings more efficient. Docyt’s AI learns and remembers how to categorize transactions individually and in bulk. No more time spent reviewing bank statements and searching for paper receipts. Docyt automates digitizing receipts and matches them with corresponding bank transactions using live bank feeds from over 12,000 financial institutions. Uncleared deposits and checks, as well as undocumented transactions are identified by Docyt.
Additionally, Docyt continuously creates the journal entries in your accounting software and attaches the documentation such as receipts and invoices. If you make a change to a journal entry, such as changing the categorization, Docyt will automatically make that change in your accounting software too. Since the accounting software is continuously updated, so are your financial statements. You’ll always have a real-time P&L and balance sheet for each business.
Using continuous reconciliation, Docyt helps alleviate the stress of performing month-end closings. Your company will be able to uncover and resolve discrepancies throughout the month, rather than at month’s end – making the reconciliation process faster and simpler.
Automate the Bank Reconciliation Process
Docyt’s accounting automation software handles the coding of transactions, journal entries, and reconciliation of bank and credit card accounts in QuickBooks® – making the month-end closing process more efficient.
If you’re looking to streamline reconciliation and month-end processes, Docyt has you covered. Book a demo to learn more today.