Steps to Faster Month-End Management Accounts in Arts Organisations

Why is month-end reporting difficult for arts organisations?

Many arts organisations are not-for-profit and rely on a variety of income streams to operate, including donations, legacies, local authority funding, and public fundraising. As a result, arts finance teams are responsible for managing a complex mix of funds.

Arts finance teams may need to report on the following income streams:

• Restricted and unrestricted funds
• Grants from Arts Council England and other local authority funders
• Ticket sales and venue hire income
• Memberships, donations, legacies, and sponsorship funds
• Different productions, exhibitions, and programmes

While operating in lean finance teams, the same people must manage day-to-day transactions, track and report on funds, complete payroll and budgeting, and produce management accounts at each month-end. Added altogether, these responsibilities can become a huge task list, particularly at an already busy month-end close.

When month-end arrives, and finance teams must complete reports while managing business-as-usual (BAU), reporting can be delayed, impacting the whole organisation. 

Here, finance leaders and other decision-makers must make decisions based on outdated data rather than live information, leading to potential budget risks or a failure to act when ticket sales are performing poorly.

Likewise, finance teams can end up spending considerable amounts of time preparing reports for management accounts, therefore, they have little time to analyse the numbers and provide meaningful commentary. However, being aware of this reactive cycle of reporting is the first step to overcoming it.

We’ve outlined five ways arts finance teams can produce management accounts quicker, including automating repetitive tasks and empowering budget holders with real-time insights.

1. Simplify your chart of accounts

Reporting is often delayed when organisations attempt to capture every reporting requirement by extending the COA to include reporting dimensions within it.

To solve this issue, finance teams can use different dimensions for projects, departments, venues, productions, or funds, alongside a simpler COA. This helps to reduce complexity while ensuring that finance teams can report across multiple different dimensions accurately.

2. Reduce spreadsheet reliance

Spreadsheets are a valuable tool for finance teams, but heavy reliance on them usually indicates an opportunity to gain efficiencies by upgrading processes or systems. 

Reporting, reconciliation, and consolidation are all activities that should be done within a finance system, but outdated software often fails to support this type of efficient accounting.

As a result, arts organisations may struggle with:

• Version control
• Duplicated data entry
• Increased risk of errors
• Additional reconciliation tasks
• Delays and difficulties producing reports

Reducing spreadsheet reliance doesn’t mean completely eliminating them. Instead, best practice is to ensure that core reporting, consolidation, and financial control processes all happen within the central finance system.

3. Automate time-consuming financial processes

Many month-end activities are time-consuming and repetitive, which is why many arts organisations benefit from automating accounting tasks. For example, by automating bank reconciliations, recurring journals, and invoice approvals, finance can free up time to perform value-adding analysis work.

In these instances, automation helps arts finance teams gain quicker access to accurate performance or show data to analyse and present in management accounts.

4. Improve visibility across projects and funding streams

Arts organisations often need to report financial information in multiple different ways, from project to funding source, and venue to department budget. When reporting structures aren’t consistent, arts finance teams can find themselves duplicating efforts to produce similar reports for different stakeholders.

However, this is often time-consuming and prone to reporting errors. To solve this, try creating custom report templates that format information to eliminate duplicated effort and increase reporting consistency over time.

5. Give budget holders access to information

Finance teams often face a backlog of queries about performance and show ticket sales, remaining project budgets, sponsorship income, and many other financial information requests. However, this puts unnecessary strain on finance as they must still complete BAU. 

By providing department managers and programme leads with real-time dashboards tailored to their job roles, finance can reduce the bottleneck of queries while empowering budget holders to take control of their spending. 

When month-end then rolls around, budget holders already have access to the necessary information to create reports, without having to ask finance and wait for their response. 

What does good look like at month-end for arts finance teams?

An efficient month-end in an arts organisation relies less on accessing data, and more on how it’s handled. It should aim to provide key stakeholders with the real-time visibility they need to report on data and make informed decisions that benefit the entire organisation.

In practice, this looks like:

• Faster reporting and close cycles
• Increased confidence in data accuracy
• Greater visibility across projects, performances, and funds
• Less time spent on manual reconciliation and consolidation
• More time available for analysis and planning

The ultimate goal is not simply to close the month faster. It is to create more capacity for value-added finance activities.

Shifting from a reactive to a proactive finance team, one that prioritises automation and insights, will help arts finance teams to tackle month-end effectively. After this, finance can produce faster management accounts and free up time to analyse the information in those accounts, aiding long-term decision-making in the process.

Contact our dedicated team of solution consultants, all from accounting backgrounds, to understand how Xledger can streamline your month-end while providing your finance team with accurate, real-time insights.