The month-end close is a critical tool in any tech company’s arsenal. It’s also a lot of work.
Gathering up all of the details you need to look back over the last month and account for every penny can be a major lift. Add in the need to update key financial reports and it’s no surprise a lot of founders put this to-do off.
But technology is transforming the way businesses tackle the month-end close. The right tools can deliver a whole range of benefits, helping you bang through your month-end checklist with speed and accuracy.
Benefits of leveraging tech
Before we talk brass tacks, let’s explore some of the perks the right fintech stack can yield for your month-end close. Knowing these potential benefits can help you pick the right solution(s) to integrate for your startup.
Specifically, founders and finance teams benefit from implementing fintech that can:
- Collect financial data into a single platform, then transform it there. Using an accounting software that syncs with all of your accounts can pull in all the transactional data from your business bank accounts and credit cards, for example.
- Make expense management easier. Today’s sophisticated tools can integrate with your email provider to directly pull in emailed receipts, for example.
- Streamline organizing and validating financial records, e.g., matching invoices to purchase orders, grouping expenses into automated categories.
- Provide for real-time collaboration, allowing you to gather up the information you need when you need it.
- Deliver customized workflows so you can tailor your month-end close process to your company, then easily repeat it month after month.
- Automate the creation of key financial reports.
Take some time to think about what would be most useful to you as you handle your company’s month-end close.
Different startups usually have different priorities. If your team is small and you have a high level of trust, for example, expense management might be low-priority for you. Instead, you might seek out a tool that can pull in expenses and organize them into different categories. Or if your team is remote, fintech that allows for real-time collaboration might be your focus.
Get clear on what will drive success for your business while improving speed and accuracy in your month-end close. Knowing your must-haves makes it easier to identify the right tech for your company.
Tools that can help
While the ideal fintech stack hinges on your company’s unique requirements, there are a few categories that we recommend all founders and finance teams explore:
Cloud-based accounting software
With a solution that operates in the cloud, you can access real-time financial data from anywhere. This helps you move faster because you’re not waiting for financial records to get entered into a system and manually delivered to you.
Specifically, a good accounting software should capture transaction data from any sources relevant to your company, then pull it all into this single location. Ideally, it will also categorize transactions and, when appropriate, match them (e.g., invoices to payments) for you. This automation helps you move faster while also building in a level of accuracy that would be hard to replicate without significant time investment.
Some of the leading providers of cloud-based accounting software are:
Enterprise resource planning (ERP)
ERP systems integrate information from across your entire business into a single solution. You can use the ERP to match invoices to payments, automate invoice processing, and streamline a myriad of other finance functions.
When it comes to your month-end close, a good ERP will let you pull data from every department from which you need it, e.g., sales, marketing, finance, HR, procurement. This way, you can move more quickly while still getting the granular level of detail that you need.
Some of the leaders in this space are:
AI-driven analytics
Your ERP, accounting software, or other elements of your fintech stack may include AI-powered analytics. If they don’t, you can also deploy a standalone solution (e.g., IBM Watson, Tableau, or Microsoft Power BI) to help you here.
A strong AI tool can help with all of the following:
- Automated creation of financial reports
- Cash flow forecasting
- Discrepancy, deviation, and error detection
- Expense categorization
- Revenue forecasting
- Transaction matching
- Trend identification and analysis
Tips to find the right month-end tech tools
First off, do your homework. Don’t take vendors at their word. Instead, read online reviews about how that fintech tool has performed for other companies. Ideally, you also want to demo the tool before you decide to integrate it for your business. That helps you ensure that it’s going to deliver the benefits you’re expecting — in your month-end close and elsewhere.
As you’re exploring tech tools that can help, compare multiple options in the same category. You want to evaluate vendors on price, of course, but also look at the level of support they offer and how scalable the solution is. Perhaps most importantly, evaluate how that tool can connect with any others you have in place. If you already have an ERP but you’re looking to implement an accounting software, for example, you definitely want to make sure those two solutions can sync data between them.
All told, building a fully integrated fintech stack helps you get all of the financial data you need onto your desk so you can tackle your month-end close. The right tools should also clean and organize that data for you, even organizing it into the appropriate reports, so you can move through your close with speed and accuracy.
Getting a strong fintech stack up and running requires some work. But you don’t have to take that on alone. Here at ShayCPA, our team specializes in accounting for tech companies. That means we work with clients on the leading edge of the latest solutions, which has propelled us to the forefront of fintech tools. We can help you explore your options and pick the right one(s) to support your startup’s success.
For support choosing tools to make your month-end close faster, easier, and more accurate, contact us.