Can Cloud Accounting Solve Month- and Year-End Challenges?

What are the culprits causing month- and year-end migraines

1. Data might be missing

Month- and year-end processes are dominated by a hunt for hidden information, which in an ideal world would never be missing in the first place.
The reasons for the missing data are routine enough that we probably needn’t remind you of them, but here’s a non-exhaustive list of why data may be missing:

• System integration issues
• Suppliers have failed to bill in a timely manner
• Purchase orders are still pending authorisation
• Accounting team members are waiting for data from other departments
• System complications that result in information becoming stuck in the pipeline

2. Data might be unreliable

Month- and year-end often involve a trade-off. As Mascha’s research indicates, the trade-off is “between producing the most accurate financial information and providing timely information.” [1]

Without a modern cloud ERP, unreliable data is hard to avoid, whether it is the result of human error, unreconciled accounts, or some other glitch in the process. Not only that, but identifying and correcting unreliable data at its source becomes a time-consuming task that accountants must manage, while simultaneously providing their organisation with timely information.

3. Technology-related problems inflate the issue

Without suitable, modern technology that’s compatible with a company’s systems, accountants are relying on manual inputs, calculations, and reconciliation – all of which consume more time and contribute to error-prone data.

4. The scale of your operation multiplies the challenge

Month- and year-end tasks grow along with an organisation. Mascha’s research found, “One large Fortune 500 company indicated that they completed nearly 6,000 tasks during the financial close process…” [1]

So, if you’ve gone from having a small accounting team, perhaps in a single location, to a large team in many locations, your processes and technology will likely be feeling the strain.

Beyond the stress: the right technology makes closing easier

You know how it goes: month- and year-end doesn’t go the way you wish, and company decision-making gets hampered due to errors or a lack of real-time information.
At times, your senior managers and budget holders might be drawing on data that’s weeks out of date, but they might not complain because this is a story as old as accounting. Everyone gets used to the delay and the imperfect data, and we make do.

If you’re unsure how your organisation compares to others in this regard, it’s worth using resources to check. APQC recommends benchmarking within your industry and comparing your times with similar companies. For example, organisations with less than $100 million in annual revenue have a median cycle time of 10 days for year-end. [2]

But how can you go beyond the average when it comes to closing time?

Here are a few ways that using a modern cloud accounting solution can solve the challenges of month- and year-end.

1. Increasing automation

With modern cloud accounting software, you can reduce the number of touchpoints for accounting professionals, speeding up the process and reducing the opportunity for human error. A 2022 Gartner survey of 155 finance executives revealed that 55% of respondents aimed for a touchless financial close by 2025 [3], an ambitious goal that could only happen with the right technology.

One example of how Xledger facilitates this is through automatic journals. By automating some of the following journals, you reduce the need for month-end calculations and inputs:

• Depreciation
• Prepayments
• Deferred income
•  Reallocation
• Auto-reversing accruals

2. Integration between systems

To be streamlined, technology needs to integrate with other systems. You want your inputs to be a ‘change once, update everywhere’ situation. Xledger’s in-system balance sheet reconciliation functionality is one example of this.

Similarly, Xledger’s integrations save you from having to jump between systems, export and import data, and fix inaccuracies in spreadsheets. Instead, you can face month-end with the power of real-time, accurate data.

3. Flexible reporting periods

Flexible reporting enables managers and budget holders to access real-time information at the click of a button, allowing the accounting team to stay ahead of risks and financial trends.

At year-end, for instance, Xledger offers Period 13 functionality for posting audit adjustments, so you don’t need to wait before closing Period 12. As soon as you’ve got your management accounts, you can make them available, and you can post any adjustments the auditors ask for separately.

The system will also post relevant opening balance journals for you at year-end, as well as give you a draft opening balance journal for the new financial year, which means you can get a balance sheet from month one.

Next steps

To learn more about our true-cloud ERP software, made by accountants for accountants, get in contact with one of our dedicated team members or book your free demo today.

References

[1] Mascha, Maureen (2014), The financial close process: Implications for future research, International Journal of Accounting Information Systems. Elsevier BV.

[2] Benchmarking (2025). APQC.

[3] Gartner (2022), Gartner Finance Survey Shows 55% of Functions Aiming for a Touchless Close by 2025, Gartner.com