Accounting Month-End Close Nightmares #2: Compliance Crunch
The way I see it, most accounting close nightmares come from one of three sources:
Nightmare #1:
Crunch-time
Nightmare #2:
Communication
Nightmare #3:
Compliance
In my last blog post we touched on the ways in which automation can smooth the first two: by automating the accrual process, the month-end close can happen more rapidly, and with more direct input from vendors.
But what about the greatest nightmare of all: compliance?
Compliance: A Disaster in the Making
If you talk to any accountant in the world, I’m pretty sure they’d say the biggest worry that keeps them up at night is compliance. After all, the regular cadence of financial reporting for most large companies not only needs to be accurate, it needs to be verifiable and fall in line with GAAP, the Sarbanes-Oxley Act (SOX), as well as all applicable IRS, FTC, and SEC rules and regulations.
SOX alone has 66 sections to follow, making compliance not only difficult, but expensive. The requirements are lengthy and complex — and noncompliance has brutal consequences. Millions of dollars in fines, potential jail time…sounds like a nightmare to me.
Compliance and accuracy go hand in hand, of course. And even unintentional misreported journal entries can have unpleasant consequences. Many company bonuses and budgetary decisions are determined by the trends accounting is reporting. If you’re off in your numbers, you’re literally affecting the livelihood of your coworkers.
And let’s follow through the entire thought process. A publicly traded company releases inflated numbers (because of your mistakes). Their stock prices go up. Those numbers turn out to be mis-statements. You could legitimately have riots on your hands from the stock-buying public, not to mention enormous legal issues with the SEC.
Accountants have a lot of power. And therefore we’re under a lot of pressure to get things done accurately, and with full compliance.
So how can automation help with compliance?
Like any piece of tech, automation was created to solve the big problems facing accountants on the ground. The month-end close accrual process is fast-paced, complex, and requires organizing huge pools of data from potentially hundreds of sources.
That’s where automation comes in. By automating accrual processes and getting your numbers directly from the source, you’re far less likely to make errors or miss expenses. Instead of worrying about individual accounts, you can take a step back and examine the bigger compliance picture, lowering the likelihood of misstatements and audits.
Interested in learning more? Schedule a personalized demo of Gappify’s game-changing automation solutions today.
Todd Cary
Product Expert
Gappify
About Gappify
Gappify, founded in 2016, is a cloud-based provider of accrual automation solutions for mid-market and enterprise accounting teams. The company is headquartered in New York City, with offices in Berkeley, California, Washington DC, and Manila, Philippines.
Its team consists of accountants and CPA’s from Big Four accounting firms and software innovators. Gappify is also supported by strategic advisors from some of the world’s most recognized technology companies and is affiliated with the top companies & accounting organizations.
