Remote Working Rurthers The Case for Continuous Accounting



Back when many of us worked in the office, a sort of shared experience for those who didn’t work in one of the departments involved in month-end close is seeing those who did. There was probably muttering about how late they would need to be there that night – and the night after that, and probably on Saturday – so that they could answer questions, perform their functions and above all, access the on-premise systems their accounts were tied to.

But when coronavirus hit, that shared office reality evaporated, fast. Something which was already challenging had layers of difficulty piled on – evidenced by even the London Stock Exchange granting delays and extensions in financial reporting deadlines.

Even though they didn’t really know what was coming, some organisations were simply better prepared. In March, organisations that could continue to access sensitive financial data outside the office walls and which had been for years laying the groundwork to automate many of the processes involved in closing the books had the tools in place to close remotely.

They were better prepared because they had worked to adopt continuous accounting processes. Continuous accounting isn’t a technology, it’s a process enabled by automating routine accounting tasks as well as the ones that require complex calculations – like depreciation or amortisation. The close cycle becomes nearly continuous because of automated reconciliation tools between AP sub-ledgers and the general ledger, automated consolidation and intercompany transfers with eliminations, as well as the automated generation of financial statements. Technology is used to process and post transactions in real time.

The end game is that booking and reconciliation processes occur continuously, not at the end of the month manually (most often in Excel). For that reason, the finance team has a real-time view into its financials – and most importantly in our current environment, its cash position.

Prior to the pandemic, increased digitisation of finance functions such as analytics and fraud detection ranked high amongst finance automation priorities for 200 U.K. finance leaders surveyed by Robert Half. But less than a third said their automation plans included accounting functions, vendor/client interfaces or financial reporting.

The coronavirus pandemic has brought renewed focus to the benefits of automating the many tasks that go into the month-end process and the obvious benefits of leveraging cloud-based technologies to do so.

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Source: Accountancy Age

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