Why you need an efficient month-end close before advisory services

Cloud accounting and bookkeeping technology has enabled firms to increase efficiency and gather accurate data in near real-time. As such, one of the best steps a firm can take to prepare for the future is to expand its service offerings so they can provide more value to clients.

Building upon compliance services (such as tax returns, outsourced bookkeeping, and monthly reporting) with advisory services (such as business planning, software implementation, and virtual CFO services) can enable your firm to increase revenue and become a valuable business partner to your clients.

Adding these types of services isn’t as simple as listing them on your firm’s service menu, however – it’s critical to set the proper foundation and ensure you’re collecting the data you need to provide your clients with the best possible business advice.

Your first step to advisory

An efficient month-end close is one of the most important processes your firm can have in place before offering advisory. If advisory is truly a goal for your firm, nailing down month-end close will enable you to have two essential ingredients for offering advisory:

1. High-quality data – Accurate reconciliation is a critical part of the month-end close process as it ensures you’re able to access an up-to-date balance sheet, P&L, cash flow statement, and other critical business data. This high-quality data is essential for advisory as it will dictate the value of your advice. Think of it this way: poor quality data in means poor quality advice out.
2. Relevant business advice – Completing month-end efficiently will also ensure you’re getting the data in time to make an impact on your clients’ businesses. Out-of-date data is just as unhelpful as poor quality data – your clients will want to know how to proactively change their business to reach their goals.

Achieving an efficient month-end close

So, what does it take to achieve an efficient month-end close (and ensure you’re collecting high quality, relevant data)? The answer is in real-time bookkeeping – or, as near to real-time as you’re able to achieve.

Many advisory-focused firms have workflows and technology in place that enable them to complete bookkeeping weekly. Start to determine your weekly bookkeeping workflow by mapping out your current workflow.

Write down every necessary step – an example of your weekly bookkeeping tasks list could include:

• Collect all relevant financial documents
• Review A/P report
• Bill pay
• Ensure coding is accurate (e.g., check GST coding, if applicable)
• Publish receipts and invoices to general ledger
• Reconciliation (deposits from POS, deposits from Stripe, open transactions)
• Review uncashed checks
• Email client(s) with any questions on weekly transactions

From there, determine which processes are taking up a lot of time and can potentially be simplified with automation. For instance, determine what’s slowing down your reconciliation process – often, the biggest challenge to achieving real-time bookkeeping lies at the front-end of the bookkeeping process, during source documentcollection, which is essential to reconciliation. Much of the document collection process relies on your clients sending documents, and if they’re not doing so efficiently, it can cause major delays in the entire bookkeeping process.

Standardising your process and automating wherever possible (without compromising on data quality) will lead you well on your way to achieving weekly bookkeeping and, consequently, an efficient month-end close.

Stepping into advisory

And there you have it! With the right processes and tools, you can complete bookkeeping in as little as 3-5 days after month-end, putting you in a great place to offer valuable and relevant business advice to your clients.

There are several critical processes beyond an efficient month-end which your firm should nail down before stepping into advisory. For more details on the processes and tools your firm ought to implement before offering advisory services, download our free Pre-Advisory Checklist (presented in partnership with Hubdoc).

The checklist includes:

• An overview of the journey from compliance to advisory
• Details about the processes required to offer advisory (such as an efficient month-end close)
• A list of tools that will set you up for advisory success