The first two weeks of the month are eerily quiet. Ask a finance person to meet and the answer is likely “not this week, it’s month-end”.  

Agencies work off a month-end close calendar with key milestones that can start as early as the last week of the current accounting month and last up to 10 days of the following month. While some specifics might vary, “closing the books” involves checking off a list of monotonous tasks. For example: 

•  Get all client invoices out and record all cash receipts
•  Clear supplier invoices for payment 
•  Approve submitted expense claims 
•  Take up or write-off revenue on a project 
•  Prepare, approve, and create journal entries
• Analyze accounts, troubleshoot variances, make adjustments. Repeat.

These tasks could include prerequisite and follow-up sub-tasks turning it into a marathon to get the financial scoreboard right. The agency is an interconnected web of people and processes. This interdependency is demonstrated month after month when the finance team chases after multiple teams to complete their part of the process and manually collates reports to close the books. 

There are three operational efficiencies your agency can adopt today to shorten your close cycle and, more importantly, alleviate the strain and stress on your finance team.

Systematize approvals across teams 

What it is and why it’s important

Systematizing approvals does not mean replacing finance directors with machines. Systematizing this process means that all financial transactions requiring review and sign-off get automatically routed to the right person at the agency. Automated routing and real-time analysis of financial transactions ensure that they’re approved or acted on if follow-ups are needed. Just-in-time adjustments eliminate last-minute corrections that could delay your close or, worse, uncovered after. 

Action item # 1

Activate financial approvals within your ERP to ensure that all transactions – client invoices, vendor invoices, cash receipts, journal entries, and revenue take-ups – are automatically routed for review and sign-off as soon as they occur. 

Learn more about Accountability’s integrated manager approval workflow. 

Instill financial accountability across the agency  

What it is and why it’s important

Agency finance teams have historically been tasked with generating all cost-related reports and sharing them with the account management, production, or media investment teams. While the finance team is still responsible for ensuring the accuracy of an agency’s balance sheet and income statement, high-performing agencies understand that everyone in the organization impacts the bottom line. 

The agency is an interconnected chain of people and processes. A broken link in this accountability chain could delay your month-end close in the short term, but it has a direct impact on your long-term bottom line. 

Action item # 2

Give the “front of the house” access to run their own reports on-demand. What this looks like: 

• Account managers have the latest revenue data for their clients, can query all open receivables, spot errors in client billing, and quickly analyze variances to budget down to the project level. 
• Producers can quickly reconcile purchase orders with vendor invoices and have detailed data to direct payment priorities. 
• The leadership team has an executive dashboard to see the agency’s current financial position, glean trends on profitable projects, and, if they want to, see the underlying financial transactions without waiting a month for reports.

The less time the finance team spends running and packaging reports, the more time they can spend on analysis and strategy.

Learn how Accountability is enabling financial visibility across agencies. 

Let your financial management platform do the heavy lifting

What it is and why it’s important

Month-end activities are arduous to begin with, but agencies face additional complexities, often forcing finance teams to manage the process by cobbling together data from multiple systems. Manual consolidation significantly slows down the process and is prone to error. A best-of-breed financial management platform recognizes the nuances of the agency business and enables efficiencies by integrating with the agency’s tools of choice and automating onerous tasks. 

Action item # 3

Survey your team to assess how much of your month-end and intra-month financial activities are managed within your ERP system. A modern, agency-native financial management platform provides the following and so much more out-of-the box.

• Automated revenue recognition
• Dynamically updated work-in-progress summaries to facilitate WIP management by client or project
• Automated media cost reconciliation 
• Month-end management ‘reporting packet’ derived directly from the platform because the key dissections required by the agency — office, clients, projects, tasks, departments, employees, vendors — are stored with accounting transactions. 

Incorporating these best practices in your day-to-day process will significantly reduce the backlog of things to do at month-end and give your leadership team real-time visibility into financial data to drive decisioning.

Is your ERP doing the heavy lifting for you? Accountability can help.