Accounting teams that handle a high volume of transactions and complex finance operations usually confront the same set of problems when it comes to the month-end close:
- Endless reconciliations across a smorgasbord of different systems and sources
- Painstakingly preparing and manually entering journal entries one by one into the ERP
- Unexplained discrepancies that require lengthy and labor-intensive investigations
- Automating transaction matching the best you can with VBA scripts or X-LOOKUPS
- Scrambling to gather – and oftentimes beg for – invoices and receipts
- Downloading bank and PSP statements one by one and then manually aggregating them
- Trying to record issues and their resolution without a robust documentation system in place
- Spiraling into a panic because one member of your team is sick or goes on vacation
But automating your finance processes can make the month-end close infinitely easier, smoother, and faster.
Here are 12 ways automation can change the game for your next month-end close.
1. Automate transaction matching for high volumes and across many different sources with AI
(Rather than relying on a patchwork of VLOOKUPs, VBA scripts, and SQL queries, or worse, doing it totally manually)
The challenge: Finance teams working in Excel can automate transaction matching to a degree by running VLOOKUPs or VBA scripts, but those methods can’t scale with a business that’s processing high volumes of transactions and managing increasingly complex payment flows.
The solution: An automated solution like Ledge automates high-volume transaction matching, even across many different sources and for complex one-to-one, one-to-many, many-to-one, and many-to-many transaction scenarios.
It uses AI and machine learning models to automatically match settled payments to the corresponding source, whether it’s the invoice, database, bank, PSP, or ERP. This includes partial payments, refunds, chargebacks, payment failures, and payments that cover multiple invoices (or vice versa, one invoice that’s attached to multiple payments.)
2. Easily identify unrecognized transactions with AI suggestive matches
(Rather than chasing down clues, checking across systems, and calling the bank)
The challenge: All finance teams deal with payments they can’t identify, which requires you to comb through bank statements and chase down clues from individual transfers across your billing systems or ERP to ascertain which invoice they pertain to.
Doing that with a high volume of transactions at scale can be an actual nightmare – like searching for needles across an entire field of haystacks.
The solution: Automated finance tools like Ledge use AI and string-matching algorithms to reconcile invoices and bank statements even when there are missing identifiers.
If the system doesn’t identify an exact match, it suggests options to account for scenarios like name mismatches or missing information, making it straightforward to perform investigations and quickly pinpoint the cause of the discrepancy. For teams handling a high volume of transactions, this is a huge time saver for the month-end close.
3. Achieve continuous close by automatically reconciling across all sources and accounts in real-time
(Rather than waiting until the end of the month to manually tackle a huge mountain of bank reconciliations)
The challenge: Most finance teams know they should perform reconciliation on an ongoing basis, whether it’s daily or weekly, so that they don’t face a mountain of unreconciled payments at the end of every month.
But maintaining a state of continuous close requires a tremendous investment of time, manpower, and resources when you’re manually managing your finance operations, and isn’t possible for many teams.
The solution: A tool like Ledge automatically performs reconciliation and generates respective journal entries around the clock in real-time so that your team is always and effortlessly in a state of continuous close.
This saves your bookkeeping and accounting team multiple working days every single month. (Ampla, a fast-growing fintech, shortened their month-end close by 5-6 days with Ledge.)
Look for software that can handle any scale and easily integrate across hundreds of bank accounts, PSPs, databases, invoicing and billing systems and your ERP, and make sure that it captures every detail of every transaction, including fees, taxes, refunds, chargebacks, points and rewards, discounts, take rates, and commissions.
4. Detect issues and handle exceptions in real-time with continuous monitoring
(Rather than waiting until the end of the month to discover nasty surprises)
The problem: Teams that don’t perform continuous reconciliation around the clock take time to detect issues such as duplicate transactions, late payments, missing transactions, bounced checks, or ACH reversals.
Discovering these nasty surprises at the end of the month can leave your team in a panic to perform investigations and rectify issues with a tight deadline looming.
The solution: Because an automated solution like Ledge performs reconciliation continuously, it monitors and detects issues in real-time and sends your team alerts when they arise rather than surprising you at the end of the month.
Get real-time, customizable alerts to proactively spot risks and handle exceptions before they damage the company’s financials or cause you to miss deadlines.
5. Automate journal entry posting to your ERP with customizable rules and permissions
(Rather than manually approving and posting every entry into your ERP one by one)
The challenge: Journal entry preparation, approval, and posting can be painstaking, requiring you and your team to review every journal entry, decide which account cost center it should be allocated to, and then manually enter that data into your ERP.
When you’re dealing with high volumes of transactions and/or financial data fragmented across many different sources, that can significantly add to the burden of the month-end close.
The solution: An automated finance solution like Ledge supports the automatic preparation, creation, and posting of journal entries, directly integrated into your ERP, per fully customizable predetermined rules and workflows.
Not only does this greatly mitigate the risk of incorrectly recording a journal entry in your ERP, but it’s also a huge time saver for your day-to-day operations.
Set up whatever rules and approval flows work best for your business – such as the flexible generation of aggregate journal entries, per transaction, by month, or by product line – and maintain total segregation of duties with role-based permissions.
Bonus: when your audit rolls around, the audit team may only need to review the logic of the journal entry posting and decrease its sampling of journal entries to verify compliance, making sampling a breeze.
6. Collaborate as a team to execute the end-to-end reconciliation process in one centralized location
(Rather than ping-ponging different versions of Excel files back and forth via email)
The challenge: When your finance operations are fragmented across multiple bank accounts, PSPs, and your ERP, your team’s work during the month-end close inevitably becomes fragmented, too, with different members working on different documents, making it difficult to stay 100% aligned in real-time and increasing the risk for errors.
The solution: An automated solution like Ledge centralizes all of your cash operations in one centralized location. The work is performed, approved, and documented all in one place, making it super easy for teams to collaborate even on high volumes of transactions and complex flows.
Assign tasks to different members of your team, track who’s taking care of what, and see how long it’s taking your team to resolve an issue.
With everything centralized in one platform, your team can more easily collaborate and solve problems. Rather than moving back and forth between files and emails, when they’re alerted to an issue, you can simply copy and paste a transaction URL and send it to the controller or treasurer and work as a team to investigate.
Bonus: it also gives managers instant visibility into exactly where things stand because they can see the entire reconciliation process from start to finish themselves.
7. Easily build out balances and breakdown settlements across PSPs, banks, and other processors
(Rather than painstakingly calculating them yourself in Excel)
The challenge: Many finance teams manage PSP reconciliation manually in Excel, which is a tedious, labor-intensive, and error-prone way to build out balances with a breakdown of all activity, settlements, and fees.
The solution: With automated finance operations software like Ledge, you can easily generate automated data investigation reports to determine the balance as of the cut-off date across all PSPs.
The system consolidates the data across all accounts into one centralized location and enables you to drill down and map out the expected PSP future settlements.
You can also easily generate reports to show a detailed breakdown of processing fees associated with any transaction and which cost center it’s associated with. The cherry on top is that the system can then automatically post a journal entry per your customized rules and logic.
8. Implement robust internal controls with automated approval flows and audit logs
(Rather than scrambling to manually document everything as you go)
The challenge: Implementing internal controls and achieving SOX compliance is tough when you’re manually approving journal entries and managing everything in Excel, which is prone to manipulation and errors.
The solution: In an automated finance operations tool like Ledge, every action, whether it’s automated or manual, is recorded and posted in an approval process with an audit log to support it.
With role-based permissions, clearly defined approval flows, and real-time collaboration and commenting, you can maximize data consistency and accuracy and proactively mitigate risk.
Easily manage an automated approval flow of journal entry postings and reconciliation review, see who created the logic and when, and whenever someone intervened to perform a manual match, easily see who did it, when, and why with a detailed comments log. This makes SOX compliance a breeze.
9. Automate FX conversion and easily match payments and invoices across different currencies
(Rather than manually accounting for the exchange rate differences yourself)
The challenge: Finance teams reconciling accounts across multiple currencies frequently encounter mismatches between invoices and bank statements during the month-end close.
When managing finance operations manually, this requires you to vigilantly monitor fluctuating exchange rates and ensure that all conversions align accurately with the financial reporting period.
The solution: A tool like Ledge tracks FX fluctuations in real-time and automatically calculates the conversions to align with the financial reporting period so you don’t have to track it manually.
It then uses AI to easily identify which payment corresponds to which invoice, even if they’re in different currencies, and then automates matching and journal entry posting.
10. Significantly speed up discrepancy investigations with instant visibility into the entire lifecycle of a transaction
(Rather than manually digging through bank statements, billing systems, databases, or your entire ERP)
The challenge: Businesses like marketplaces and fintech companies generally manage high volumes of complex payment flows, including inflows and outflows.
Only a small part of the payment journey is documented in your ERP, and when something goes wrong, it can be incredibly difficult to manually track a transaction from customer collection all the way through to merchant payment in order to pinpoint the issue.
The solution: A solution like Ledge tracks payment flows from start to finish across many different systems, providing instant visibility into the full loop of how the funds originated and were settled from start to finish.
If and when there’s an issue, whether it’s AR or AP, you can quickly pinpoint the cause, document it, and work to remedy it.
11. Easily reconcile timing differences, funds in transit, and cut-off dates
(Rather than painstakingly manually adjusting journal entries one by one)
The challenge: Payments sent near cut-off dates can wreak havoc on your reconciliation processes, forcing you to track pending settlements and manually adjust journal entries to reflect the transactions during the correct period. This can be painstaking when you’re dealing with high volumes.
The solution: When journal entry posting is automated in real-time around the clock, it solves for timing differences and accounts for discrepancies between when the transaction event is recorded and when the funds land in the bank account.
A tool like Ledge performs reconciliation and reporting on a continuous timeline so the impact of cut-offs is easily visible, eliminating the need for your team to painstakingly track pending settlements and manually adjust journal entries.
12. Free your team to do more strategic work
(Rather than slaving away over tedious and mind-numbing reconciliations)
The challenge: While tasks related to cash operations are mission-critical for a business to get right, they are tedious, mundane tasks that don’t require a high level of expertise. The time that your team spends on reconciliation and cash operations is time that they’re not doing higher-value, more strategic work.
The solution: A solution like Ledge frees you from being an in-the-weeds preparer of cash-related tasks and elevates you to the position of being a high-level reviewer.
This gives you the time and perspective you need to focus your attention on more creative and advanced work, such as building new Netsuite automations or creating new strategic workpapers.
Automating the month-end close doesn’t just save time; it’s a key enabler of strategic finance
Automating the month-end close is not just about streamlining processes and reducing workload for your team; it's also a strategic move that transforms your accounting department into a more agile and proactive part of the business.
By implementing tools like Ledge, finance teams can address and resolve issues in real time, recoup funds before they’re lost for good, and provide critical insights that drive business strategy.
And as businesses scale, transaction volumes increase, and finance operations become more complex, automation is no longer a “nice to have” but a necessity for businesses that want to stay competitive and agile in today’s fast-paced, uncompromising market.
