How to Prepare the Perfect Year-End Close

How can you make your year-end book close clean, easy, and worry-free? The secret is: stay on top of monthly closing. It requires forethought and rigor each month but pays off in the end.  

test

As an auditor, I have seen many chaotic year-end closes. Accounting teams are rushing over documents at the last second and not giving us enough information to make a clean audit opinion. Chaotic closes make achieving GAAP compliance that much harder. 

In my experience, companies that have the best audits focused on clean month-end closes. Those closes made quarterly and year-ends easy.  

How to Close Each Month 

There is no need to be timid about the monthly close. Be like Dwayne Johnson when he sings, “It's about drive, it's about power/put in the work and take what's ours.” Get psyched for month-end and tackle it head-on! Follow these steps for successful monthly closes: 

1. Set up a game plan 
   1. Plan to spend more time on difficult accounts 
   2. Know who will be preparing and who will be reviewing 
   3. Keep track of everything 
2. Create a timeline and stick to it 
   1. Overall goal to be done with close (For example, complete by the 10th) 
   2. Goal is to be done by the 10th then have all the prep work done by the 6th to give time for people to review 
   3. Know the tough accounts that need more time so the prep work can be done 
3. Standardize all closing processes 
   1. Invest time between month ends to make it as smooth and repeatable as possible, even if you have no choice but to have a large excel based close task, 
   2. Keep it simple 
   3. Organize the dates to make it more standard. 
4. Invest in a close automation and management tool 
   1. There are numerous tools to be used in your automation process--do some research and find the best one that suits your team 
   2. Move past manual accounting and invest in a quicker tool that will save you time in the end 
   3. Accountants went from paper to calculators; we can now move from computers to automation 
5. Be stoked! It is important to have the right attitude 
6. Close books no sooner and no later than needed 
   1. This is where confidence comes in: If you work systematically, you can be confident in each close 
   2. To have the confidence, you need the right tools 
   3. The right tools will bring you great success

When each monthly reconciliation goes smoothly, year-end can be as simple as sending your pretty documents to the auditors. The prettier the documents, the fewer questions auditors will ask.  

If your accounting team works in NetSuite, NetClose is the tool to ensure a clean close each month. It performs the calculations of closing using data in NetSuite and posts to the general ledger. Your team never needs to leave your core financial system to perform reconciliation. 

In addition, NetClose brings a range of important closing functions into NetSuite: task management, procedure tracking and documentation, control tracking, certification management, flux analysis and amortization and accrual subledgers. These features simplify every close and ensure robust documentation. Believe me, your auditors will thank you for it! 

Bottom Line: 

Year-end close doesn’t need to be a stressful time. If you manage each monthly close correctly, closing at the end of the year is easy.