What is Financial Close software?
Financial close software, or accounting close software, provides ways to streamline the financial close cycle. “Financial close” is an accounting term used to describe the process of zeroing out the balance in nominal accounts, such as revenues and expenses, and updating the Retained Earnings account in the ledger to equal the end-of-period balance. The close is necessary to prepare these accounts for the next period's transactions.
Financial close software provides a more standardized and organized automation of the processes that controllers and accountants are responsible for at month-end close. This automation helps reduce manual work and allows for a more accurate close. With the more repetitive tasks out of the way, users are able to focus on more high-risk reconciliations. Financial close software also allows for greater transparency and collaboration within the accounting team with real-time dashboards and individual checklists.
Financial close capabilities are found both in point solutions and larger financial systems. Financial close processes are frequently supported by Enterprise Resource Planning platforms, accounting software, and Corporate/Enterprise Performance Management systems. These are usually much larger systems that natively integrate financial close processes into their workflows.
Most vendors offering financial close software include:
Account reconciliation management tools
Close Task management and assignment
Integration with accounting software
Individual tasks lists
Financial close process timeline
Historical records of past close data
Financial close process reporting
Some vendors also offer additional capabilities, such as:
Financial Close Software Comparison
When comparing different financial close software, consider these factors:
Software Scope: Is each product a point solution focused on just close processes, or a broader financial platform? Point solutions can be effective options if your organization’s close process is disproportionately burdensome or intensive compared to the rest of the accounting process. Broader financial systems may be more helpful for scalability and streamlined end-to-end accounting processes.
Scalability: is the platform scaled for smaller companies or enterprises? Smaller-scale products will likely be easier to use and manage, while enterprise-scale platforms may have more extended capabilities and be more robust and financially scalable at high transaction volumes.
Integrations: What other financial systems does the organization already use or plan to use? Financial close software will need to be able to send data back and forth from these systems, ideally automatically, in order to get the best value out of all the organization’s software. Consider integrations with potential accounting systems, General Ledger tools, and ERP platforms, among others.
Pricing InformationVendors offering financial close software do not usually offer a free trial due to the time constraints of the accounting cycle. The cost of the products can vary between $125 - $200 per month per user with licenses for individual users for SMBs. Enterprise level plans that come with multiple user licenses for multiple locations are typically more expensive. Price quotes for these larger plans can be requested from vendors.
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