The month-end reconciliation process serves as a crucial process globally in hospitality finance, where all financial data comes together to summarize financials and performance. A recent survey of HFTP members, taken ahead of the HFTP 2023 Annual Convention this past October, exposed a stark reality: less than 20 percent of respondents can finalize this process within five days, with a significant 12 percent taking over 11 days. This lag in obtaining accurate performance information has become a norm for many businesses – even though it is impacting overall performance.
In our session, “Accelerate Closing with Precision: Expert Strategies to Boost Efficiency While Ensuring Financial Accuracy” at the HFTP Annual Convention, we discussed some of the reasons why this is the case and explored some of the solutions that could make a difference.
1. Communication Excellence: Bridge Internal and External Gaps
Communication emerged as a significant hindrance, both within teams and with external stakeholders. Barriers often arise from past disengagement by predecessors and a perception of finance interactions as ‘reprimands.’ Strategies for improvement include assertiveness training, active listening, more frequent check-ins between teams (i.e., not only when you need something), active coaching of financial principals to non-finance leaders, and the use of checklists to ensure task continuity during unforeseen circumstances.
2. Continuous Close: Proactive Management of Accounts
While ‘continuous close’ is a proven strategy for efficient month-end closing, our survey revealed that only 7 percent adopt it consistently. This approach spreads the work over the month, addressing journal entries and other transactional activities as they occur rather than allowing them to build up. Proactive and efficient, it aids in error detection, budget maintenance, and overall preparedness. The fact so few adopt this approach (despite its advantages) may signal a need for process reassessment.
3. AI and Process Automation: Transforming the Finance Landscape
AI and process automation are becoming indispensable and redefining hospitality finance. While technology has streamlined operations, gaps persist – which are usually filled by human intervention (people copying data and staring at spreadsheets!). Intelligent automation using digital workers can eliminate these manual tasks, allowing teams to focus on complex issues. These digital workers can run on any current software, and they greatly enhance efficiency and free human resources for strategic endeavours.
What’s more, they can also address the industry's talent shortage, too. While not replacing humans, they remove repetitive processes that are often the most frustrating for team members, and they also alleviate pressure during peak periods. By automating repetitive tasks, digital workers contribute to happier employees and guests, and ultimately, more profitable businesses.
The Power of Digital Workers: The Davidson Hospitality Case Study
As we heard in the session at Annual Convention, Davidson Hospitality utilizes a Centelli Digital Worker to undertake bank reconciliations with transformative results. Formerly a manual and irregular process, digital workers now handle daily reconciliations across over 700 transactions and approximately 140 bank accounts. By automating transaction downloads, reviewing cryptic bank information, and updating the general ledger, they spotlight how intelligent automation can improve efficiency, accuracy and timeliness in financial processes.
The session “Accelerate Closing with Precision: Expert Strategies to Boost Efficiency While Ensuring Financial Accuracy” was presented at the HFTP 2023 Annual Convention by:
Thomas Smith, Chief Business Officer, Imperial Golf Club
Aric Briggle, Regional Vice President Hotel Finance, Davidson Hospitality Group
Rajan Gupta, Managing Partner, Centelli
Moderator Lisa Martin, Regional Director Hotel Finance, Davidson Hospitality Group