Verian

That Time of the Month

February 7th, 2012 | No Comments

It’s an uncomfortable topic, but I think people need to talk about it.

There are some people who become irritable, demanding, and yes – somewhat emotional, for about a week at the same time very month.  Sometimes their physical demeanor changes, they look tired, break out and sometimes appear flush in the face.

They are accountants.

Each month they face the pain of month-end closing and we should do something to help them.  For many, one of the biggest month-end issues is the “transaction trickle.” Like water coming under a closed door, transactions trickle in as closing is underway, throwing a monkey wrench into an already chaotic environment.

The best way to stop the transaction trickle is to establish, publicize, and adhere to realistic cutoff dates for all types of transactions. Here’s a handful of suggestions on how to make that a reality and stay ahead of the curve. 

Orders in approval: Understand what your typical approval timeline looks for both large and small items. If you’re a week away from the cutoff date and large item approvals typically take two weeks, you know those transactions won’t be closing that month. But do a spot check for unusually large invoices stuck in approval that may throw off the balance sheet: work to get those approved. Many organizations use advanced workflow functionalities like approval auto-escalation to keep things moving.  

Purchase Orders: Like approvals, understanding the typical life cycle of a PO within your organization will give you a much better idea of where to draw the line and what will move before and after your established cutoff date. Also look at small dollar/high volume vs. high dollar/low volume: what is the typical life cycle on each category and what’s currently in the pipeline for each? 

Travel & Expense: This category will get the greatest response since employees are the sole beneficiaries of reimbursement. Make sure it’s clear that expense reports paid in the same month need to be submitted by the cutoff date. And that includes reports not submitted, in approval and un-reconciled. Anything submitted after the cutoff date is paid the following month. 

Inventory: Another transaction type that is rife with fluctuation is inventory. It’s not uncommon for goods to arrive at a warehouse or other location and not be received for weeks. Adjustments, write-offs, warehouse transfers and counts can also add to the challenge of closing inventory with confidence. Remind warehouse staff that all these items need to be wrapped up by the closing date each month.

In addition, P2P systems like ours offer several non-obtrusive ways to gently remind users that closing is around the corner. You can send a broadcast reminder to all users about closing dates. You can even change the screen theme to a different color as a visual clue to approaching close.

Unfortunately, month-end will always be a difficult time of the month for A/P departments. But with proper planning, cooperation, and advanced tools, it doesn’t have to be nearly as painful.

Regards,

Mark Schaffner
VP of Marketing
Verian