If you complete a regular monthly close in your hotel, and I certainly hope you do. And if closing your books takes longer than three-five working days, then this is meant for you. Doing your month-end and having a final financial statement each month within one week is the benchmark for a team and system that works well. Taking any longer just means you are really wasting valuable time. If you are not the one who closes the books, but you would like the statement faster, then this is also for you.
I vividly remember the good old days when we had the better part of 10 working days to get it done. I also know what it was like when the memos would arrive that demanded yet another day be cut. I recall the objections and complaints by myself and my counterparts. It made no sense because all it meant was less accuracy and more estimates and adjustments, or so it seemed at the time.
What I learned from getting the screws put to us was incredibly valuable and it is probably not what you are thinking. If you are wondering how, we did this miracle feat and what I learned, read on.
One of the first things I was told when the walls started to come in on our monthly close was, “Do a month-end schedule.” Prior to this, we had a timeline so to speak, but the schedule was different. It demanded that it be communicated to the other managers in writing and it also had a “get the other managers more involved in the process” tone. Items like invoice cut-offs, accrual submissions, inventory schedules, GL reviews, draft financial statement approvals, commentary submissions, were just a few of the items that we added that implicated others.
When implementing a month-end schedule, it is critical to commit yourself and your team to make your critical dates to the broader hotel management team. Things like AP cutoff, GL preliminary reports, final flash, accruals reversed, income complete and booked, pre-paids complete, prior period adjustments booked, draft financials, and the final P&L. It is a lot harder to simply adjust the timeline when others are looking, and an element of greater accountability emerges.
Little by little, month after month, we got better at respecting the schedule and we also used the schedule to tighten things up so we could meet the ever-decreasing schedule from corporate.
The first thing we would do around the 20th of the month was to review the upcoming month’s schedule at a regular office meeting. Then it was presented at the department head meeting around the 23-25th. After that it was finalized and sent in writing to all, later by email. We focused on what the actual calendar looked like for the following month, getting ahead of the weekends and especially any holidays. In addition, we were constantly looking for opportunities to get things done faster.
In the accounting world, fast is good but accuracy is what counts. Knowing we had tight timelines meant more cut-offs and adjustments for things like invoice submissions, inventory counts, and we also had to build in time for the proper review and a buffer for fixing what went wrong. I can remember some very late nights and weekends that got sacrificed but come hell or high water we had to make the corporate dates, no negotiating or forgiveness here.
There are three main takeaways from incorporating a month-end schedule to help with the closing process, The two I already mentioned, communicating the schedule and using it as a tool to get more departments involved to do what you need them to do on time. The third one however was the real surprise and the most valuable.
Time. My team and I were no longer spending two-plus weeks closing the books and doing the forecast and commentary. We now had it done in less than one week and we all had so much more time to do everything else that never seemed to get done. All those special projects that never end and things that constantly needed fixing just got a 50 percent increase in the available time because we were not closing the books for two weeks.
And, to sum things up, when you look seriously at the process you undertake by doing month-end it really does not add any value unto itself. The real improvements and value get created when we can provide better more valuable and timely information from systems and processes that are efficient and work well. Working on the planning and execution allowed for more time to get it right to begin with, kind of why you really need to have a schedule and just get it done faster and better.
If your close takes longer and you are waffling on accuracy as your excuse, then you need to have another look and, if necessary, get some help.
At Hotel Financial Coach I help hotel leaders and teams with financial leadership coaching, webinars and workshops. Learning and applying the necessary financial leadership skills is the fast track to greater career success and increased personal prosperity. I significantly improve individual and team results with a proven return on investment.
Click on the image above to learn more about my video course.
Complimentary Discovery Call – https://calendly.com/hotelfinancialcoach/introduction
Be sure to check out my other services on the links below.
Stay at Home or Work – Online Workshops
The 3 Month 1-1 Financial Leadership Mentoring Program
Strategic Hospitality Financial Leadership Workshops
415 696 9593 – Cell or Text
Read a Story About How I Helped a Client
Give the coach a call today and let’s get going!
If you would like a copy of the following send me an email at
-
Hotel Financial Policy Manual – Inventory of “Sections”
Visit my website today for a copy of my FREE guidebook
The Seven Secrets to Create a Financially Engaged Leadership Team in Your Hotel
www.hotelfinancialcoach.com