Continuous accounting distributes the financial workload evenly over an accounting period. Tasks that are normally a part of the period close, including reconciliations, become a part of the day-to-day activities throughout the month or quarter. This reduces the need for any last-minute demands and extra work as the period end draws closer and speeds up closing.
When it is done correctly, continuous accounting can improve real-time reporting, strengthen the link between opportunities, challenges, and the financial costs and impacts by making the information more immediately visible to enable more accurate analysis and better-informed business decisions. Despite the benefits of continuous accounting and continuous close processes, there are still significant barriers to continuous accounting for many organizations. These barriers can include incompatible finance and IT systems and disconnected spreadsheets.
To achieved the greatest benefits from continuous accounting, a company needs a modern cloud-based finance and ERP system that delivers standardized processes, data integrity, consistency across the business, and automation. The right accounting system allows all departments to work with the same source of data and provides access to the same general ledger. It provides a common chart of accounts and a single version of data on vendors, payables, inventory, payroll, invoices, receivables, sales orders, and customers. With cloud computing and a common data source, previously, manual tasks such as journal entries, account reconciliations, variance analysis, and inter company transactions are easily automated.
In addition to automating various manual tasks, the entire finance team is united through the cloud no matter where they are located, making it easier to delegate financial close responsibilities. The accounting and finance teams can collaborate easily on daily tasks, and management has visibility into the current status of the overall process. This not only makes life easier for the entire team but also allows the team to reallocate resources to help out where needed to keep the whole process running smoothly.
Continuous accounting means reduced stress on the finance team, greater efficiency, a higher accuracy rate, and cleaner financial statements that meet or exceed your board’s requirements. With a continuous close process in place, it will deliver considerable value to your organization by providing more relevant management information earlier on and freeing up significant amounts of valuable time for the finance team and management to contribute more strategically to the business.