What is Financial Close Management Software?

Introduction

Financial close management (FCM) software is also called accounting close software. It helps companies to complete the financial close process. Many enterprises do financial close at the end of every month to keep their books accurate and successfully complete transactions. During this process, they execute tasks such as lead importing, expense approval, and bill delivery and payment.

FCM software offers functionalities such as reconciliation management, individual task assignment, and databases of previous accounting close data categorized by transaction type and month. Your accounting team can track individual deadlines and progress for each period throughout the cycle. FCM platforms integrate with accounting solutions and spreadsheets to help you document pertinent data and spot inconsistencies or noteworthy findings. They also offer corporate performance management functionalities such as forecasting, budgeting, and financial consolidation.

Features of Financial Close Management Software

Data Integration

As mentioned above, FCM software integrates with accounting solutions to enable effortless data transfer between the systems. The FCM platform vendor usually offers you the expertise and assistance you need to connect the program with your systems of record.

Financial Consolidation

FCM software automates common time-consuming tasks such as intercompany eliminations. In addition, it enables you to manage journal entries as well as minority interests, adjustments, and ownerships. The program provides audit trails to assist you to trace everything throughout the procedure.

Close Checklist

The application permits you to monitor and track routine financial tasks like ensuring finalized eliminations and checking currency rates. Your accountants can effortlessly monitor tasks, provide updates about their status, and collaborate to overcome obstacles in the process.

Internal Reporting

Top FCM tools provide complete external and internal close reporting. With web reporting, you can drill down to in-depth transaction level. Plus, one-click refresh presents instantly formatted cash flow reports, balance sheets, and income statements. Leading vendors allow XBRL integration for report books which gives you reliable financial disclosure info.

Benefits of Financial Close Management Software

Reconciliation Automation

Reconciliation is a laborious manual process as it involves large scale formatting of inconsistent info. FCM software helps to save time through automation and by aligning data from different sources such as Excel, General Ledger, and other programs. This assists in effortless identification and reconciliation. Top FCM systems provide added features such as smart transaction matching for enhanced reconciliation automation.

Greater Accuracy

It is difficult to get accurate year-end and month-end close results because of factors such as difficulty of the close work, limited time available, and the disparate nature of the procedures used to obtain a final result. FCM software streamlines and codifies the close tasks into repeatable work. This eliminates manual chores and gives you more time to work close tasks systematically. Plus, the program minimizes the chances of human error. As a result, you get accurate close results with extra time for quality analysis, and readiness for management review.

Seamless Communication

There is often lack of effective communication between the Excel and ERP solutions that many accountants use. FCM tools help to bridge this communication gap between Excel data and ERP applications to facilitate efficient financial reporting. Since financial data needs to be secure, it is not advisable to store it in the cloud. Leading FCM programs can communicate with third-party content management platforms to provide the needed conduit for security and information flow.

Task Centralization

With a manual method, you would not be able to centralize close activities. Previously, to reach month-end, manual activities such as ad-hoc conversations, in-person meetings, email communications, and checklists were used. FCM software offers a single dashboard from which you can perform all close activities. The dashboard clearly shows important tasks and percentage of completion. Plus, it automatically generates reviews and alerts, and outlines daily actions. You can share this info with your team in real time, and eliminate mistake-prone, isolated activities. In addition, the software saves supporting documents along with their related accounting process, which helps you to find files quickly and easily.

Productive Collaboration

In many fast-growing organizations, there is a collaboration issue between accounting management and junior staff. Such companies need to implement continuous workflow and process improvement which can be difficult. A FCM program helps to keep accounting employees at all levels in the loop regarding their tasks in the close procedure, and highlight important dependencies which are their responsibility. This knowledge updates the controller on close progress status, and keeps all staff members informed on the implementation of process enhancements. Plus, it makes them more responsible towards their assigned tasks. Leading FCM applications also offer a straightforward method for senior employees to share their experience and advice with junior staff to improve their knowledge.