As Q4 kicks in, it’s time to start checking off the boxes on your end-of-year financial planning checklist. These five best practices from the finance talent experts at Tatum should help you do just that.
1. introduce close-improvement initiatives
When it comes to year-end financial projects, a lot of organizations seem to think simply getting the work done on time is tantamount to success, after which relieved leadership teams are content to close the books.
Of course, that’s not how you run most other areas of your business — and it’s why ongoing close-improvement initiatives are so important. Ideally, these efforts should be overseen by a team comprising employees from multiple functions. To get things moving, focus on the following five areas:
- securing buy-in from senior-level leadership — otherwise, this is a non-starter
- communicating the initiative to your entire accounting team
- aligning everyone around the metrics that matter (and how success will be measured)
- directly involving relevant members of the finance team, including stakeholders from payroll, accounts payable and more
- establishing a reporting structure and cadence to keep everyone on track
In this respect, the end-of-year financial closing process is just like any other business process: If you really want it to be effective, someone needs to be held accountable for that success.
2. plan for the unprecedented
This year, as always, from now through November is budgeting season for most businesses.
After all, forecasting next-year financials presents challenges for all businesses. For example, are sales likely to go up or down, and by how much, and why?
Ultimately, how you answer this question and others will have broad-based ramifications for your talent acquisition strategy. As for whether it makes the most sense to bring on new financial expertise in a permanent capacity — or temporarily — has to be a consideration.
Uncertainty leads to greater resource requirements for finance and accounting departments and a lot of organizations are already short-staffed as things stand.
3. think through the ripple effects of working from home and increased digital sales
Most companies at the moment are still evolving toward hybrid models, typically with greater flexibility for work-from-home arrangements and an increased emphasis on revenue from digital channels. From the standpoint of organizational agility, both of those are good things. From the standpoint of legacy systems, not so much.
Think about the potential cascade effect, for example. The reality is that most organizations have legacy systems in place that are not designed for employees using their own devices (or accessing them from unsecured networks). What’s more, a lot of companies right now also lack the structure to optimize how they handle a rapidly increasing volume of online sales.
As a result, when capital investments are voted into the budget this season, many organizations will be looking to upgrade their core IT infrastructure — and they’ll need to bolster their existing areas of expertise in order to do so effectively, whether that means adding business analysts or bringing on board data-transfer, testing and implementation pros.
4. get proactive about reporting needs
Acing the year-end close process, reporting on a tight deadline, wrapping up an intensive audit without findings — these things are difficult enough under normal circumstances.
It’s critical to think through your unique reporting requirements well in advance of submission deadlines. In many cases, that’s going to require augmenting your workforce with trained professionals who have demonstrated expertise in areas where your team might not. For example, has your finance team ever handled complex tax filings in the past? Do your budget analysts have the bandwidth to take on year-end reporting responsibilities on top of everything else already on their plates?
Think through questions like these early on. Working with a strategic talent partner to handle your finance talent needs makes a lot of sense in that case, because it’ll save you time, headaches and hassle in the long run.
5. look forward — not just backward
Year-end reporting tends to be an energy-intensive process — so much so, in fact, that it can even bring other core finance activities to a standstill, especially if you’re understaffed. And with so many numbers to get just right, it’s sometimes tempting for team members to restrict their vision to the rear-view mirror.
But that’s a mistake. While closing processes, by their very nature, have to be backward looking, they're also a chance for your finance team to get a clear sense of where things will stand in the year that’s just around the bend. What processes or areas of the businesses are likely going to require additional investment? Where can cost savings be achieved safely and with the lowest level of risk? These are important questions — but you won’t be ready to answer them unless your team has its eye on the road ahead.
key takeaways and next steps
At this point, we’ve broken down five key (and often overlooked) best practices for today’s best-in-class organizations as they gear up to tackle their year-end financials. And if bringing on additional expertise is among your next steps, you should know that Tatum can help. In fact, we routinely supply leading companies with highly experienced professionals on demand, including:
- audit professionals
- budget analysts
- regulatory professionals
- staff and senior accountants
- staff and senior financial analysts
- tax accountants
Given the unprecedented talent scarcity again this year — including an extremely limited pool of qualified accounting and finance talent available — now is the time to take action. To see how Tatum can contribute value to your company’s bottom line, get in touch with us today.