Abandon policies, back procedures - a winning idea for the month-end!

in Policy

With the busy month-end close processes and regulatory pressures rising, you may think it makes sense to implement formal written reconciliation policies? No!

Despite the agitated chaos of the months finish, several corporations still don't have any written policies. And every corporation should... shouldn't they?

Well, there are beneficial reasons for not having them.

'Policy' is typically taken as providing an overall guiding. Then again the policy contains what most reconciliations preparers and approvers already understand.

Where's the guidance? To provide correct steering and guidance, the policies should be long and specific on completely different reconciliation challenges, however the longer the simpler neglected and forgotten and aged.

Obviously, having formal written reconciliation policies will have its advantages:

A written policy provides a quick-reference source for what should be done, maybe the way to guarantee reconciliation steps are being met within the correct order.

A written policy additionally will aid to cut back errors by providing clear visibility of expected steps throughout the ordeal.
Legal compliance is healthier when maintained (if the policies are obeyed, that is).

The greatest profit

A great advantage of written policies, however, is in coaching new or temporary employees.

Say, as an example, a member of staff falls sick throughout the month-end shut method.

During this unfortunate state of affairs you may have to be compelled to draft in temporary replacement employees that won't be aware of your templates, approvers, and archiving processes.

The remainder of your employees are busy finishing the monthly shut method, and even though you probably did have the time to run them through the method, would you with confidence say you remembered to inform them everything?

Written formal policies may be the key. on the other hand, as soon as the reconciliation policies are detailed enough to fulfil these high staking aims, they're neglected, aged and forgotten.

A smarter month-end process

A reconciliation procedure and balance reconciliation software, may be the perfect add-on to any existing accounting software or any ERP system (Enterprise Resource Planning).

A "procedure" is the short and sharp instruction, yes, but not the overall policy. And you need multiple, one each for your account type, sub-type or even just the one per account.

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Sadie Hawkins has 105 articles online and 1 fans

 

Get the vital advantage on the month close with a financial reconciliation software package from Adramatch .

 

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Abandon policies, back procedures - a winning idea for the month-end!

This article was published on 2013/10/15