Management accounts - a checklist can help

Month-ends are the most visible measure of how your finance function performs to CEOs and your fellow executive directors. These other senior leaders probably don't spend a lot of time with your finance team during the month and so don't know the quality of your team. They do, however, either get the management accounts on time, or they get them late. This is a high-profile process, and it’s painful when lateness gives a bad impression.

If airline pilots and doctors need them, then so do you

A reliable and up-to-date checklist of month-end tasks is essential. It tells everyone what is expected, to what standard, and in what order. It allows you to measure how far you are through the process at any point and gives you the ability to adjust the order and resourcing of tasks to deal with unforeseen complexities.

It also gives you a better chance of retaining staff as new staff don’t have to obtain information about the existing process verbally or in an ad hoc manner. They can instead reference a single document and quickly understand their part of the process and why it’s important to the final output.

But most importantly it's a live document on which you record lessons learned. When month-end is over, lessons learned should be converted into new tasks or adjusted tasks. You're then ready to go for the next month-end – and your lessons learned will result in faster or more accurate management accounts.

Your first checklist - every journey starts with a single step                                                           

If you don't have one already, then creating the first can be daunting. The key here is to understand that the first attempt will not be fully correct. Make sure all those involved in the month-end know this and ask for their help in gradually getting it right. Assign the responsibility for creating the first draft to someone respected by all of your teams, who has strong listening skills. If you're struggling with month-end deadlines already, your team members may be stressed and emotional and could have a lot to share. You need a calm, non-partisan member of staff to listen to their thoughts and record them. Every thought they have - regardless of how negative at first - will help you build a quality checklist which takes into account all of the inevitable challenges.

What it needs to include

The checklist needs to be simple. It should contain the nine following columns: task number, task description, owner, reserve owner (ie, who does it when the owner is unavailable), target start time and date, target end time and date, actual start time and date, actual end time and date, and lessons learned.

Mark key moments as checkpoints. These will usually include the closing of key parts of the accounts - eg, accounts payable and accounts receivable. These checkpoints give a tangible sense of achievement for the sub-teams and after the month-end allow you to quickly see which parts of the process cause the longest delays.

'Running' the month-end and who should do it

Assign the responsibility of 'running' the month-end to the same member of staff who created the first draft. Be clear about what this means. It means respectfully checking with staff how they are progressing and constructively helping them talk through challenges and work out solutions. Make it clear to them that you are only asking them to help with solutions they have the power to affect. Tell them to escalate anything else to you, and commit to making quick decisions when they do.

Debriefing: no-one comes to work to do a bad job

When month-end is over, join the debrief as a curious observer. Make sure your language is about processes and roles - never individual people. Show the team you are only interested in helping them remove barriers to make the process quicker and less stressful. Pick three barriers you can personally help with and commit to removing them before the next month-end. This will result in fewer out-of-hours working for the team and they will appreciate you for helping them spend more time with their family and friends.

If you need more insight and guidance, get in touch with Rob McNally, Accounting Advisory Associate Director, Financial Accounting Advisory Services