CPA Insight: How Cloud Technology Can Speed Your Year-end Closing in 2019
A conversation with Philip Massey, founder and President of Massey Consulting, on the challenges of the year-end close and how cloud technology can turn those challenges into opportunities and set the stage for future innovation.
Q: What are the biggest challenges that companies face as they close their books for the year?
A: If you have an older legacy system, the actual process of closing the books is the main challenge. You have to follow manual, step-by-step processes for the subledger, inventory module, general ledger— everything. And whatever you do, don’t double-click a button because you might reset and have to start over! It’s difficult, but essential, to ensure the numbers post in the right place. Otherwise, you can’t close out the current year and start the balance sheets for the new year. Reporting is often a big challenge come January or February.
Q: Which features of cloud financial management solutions would be most helpful for closing the books at year-end?
A: When you get a new cloud financial management solution, such as Sage Intacct, the old way of closing the books seems insane. To me, it’s akin to driving across the country when you could fly. That’s because, with Sage Intacct, you literally have to do nothing to close the books at year-end; it’s a self-close system. On January 1, 2019, all you do is log in and see the live numbers for the day. You simply fix any input errors, and the system will automatically adjust your numbers based on the changes you made. For smaller companies, closing the books takes hours; for larger companies, it takes days or weeks—but with Sage Intacct, closing the books takes no time at all.
Q: What do you see as the biggest challenges and opportunities for finance teams in 2019?
A: Automation will play a significant role in 2019, with a trend toward artificial intelligence shortly after that. It will be difficult to take advantage of these new technologies if you have a legacy, on-premises system. They are not nor are they capable of advancing fast enough to leap into intelligent automation. A cloud-based solution such as Sage Intacct, on the other hand, is built to integrate with and provide finance with all the benefits that intelligent automation has to offer.
Q: What benefits will finance see from intelligent automation in 2019—especially related to the close?
A: To start, intelligent automation can greatly improve accuracy by creating a self-checking environment, so finance can focus on analytics. For example, the system could point out variations or potential areas for review, such as a less-than-profitable product line. Finance will know what the machine doesn’t—that this product line supports more-profitable lines of business and can override what the machine recommends. It’s the humans that need to review the data and the trends. As automation takes hold in 2020 and beyond, accounting will have more analysts and fewer data entry specialists on the team. Larger companies will realize the benefits of intelligent automation first. Thanks to cloud technology, however, smaller companies will also be able to leverage those advantages based on economies of scale.
Q: When evaluating financial management solutions in 2019, what should companies look for?
A: Remember that there is no single system—or even group of systems—out there that is right for everybody. That being said, I would encourage organizations of any size to:
- Examine where they are with their accounting software and what manual processes are they still doing.
- Analyze this status quo to determine if it’s actually helping your business.
- Look at alternative solutions that might be out there, such as a midmarket package that automates these processes.
- Turn to the professionals for help. Selecting and implementing a technology solution require a significant investment of time and resources. The most successful deployments result from a partnership between trusted business technology experts and the finance team.