“For Singapore, financial reporting and tax requirements are clear,” says Yang Shuzhen, Director of Regional Accounting Services at BoardRoom Group. “The Inland Revenue Authority of Singapore (IRAS) provides guidelines and illustrative examples, making compliance quite straightforward. However, in countries like Thailand and Indonesia, things are more open to interpretation.”

Understanding differing financial reporting frameworks will support a more robust month-end close procedure, as long as businesses know how to adjust their reporting processes to meet local compliance standards.

ERP (Enterprise Resource Planning) systems often present another significant challenge for month-end financial reporting. As Shuzhen points out, many companies use robust ERP platforms like SAP but fail to localise them for region-specific tax and reporting requirements.

“Clients roll out a system regionally without asking if the system is localised. For example, GST in Singapore and SST in Malaysia require different setups,” Shuzhen says. “We’ve seen situations where clients manually manage GST offline instead of using the system, leading to delays and complications during month-end reporting.”

Managing transactions in multiple currencies introduces complexity in month-end closing. Companies operating across different regions need to ensure consistency when applying exchange rates.

Eunice Hooi, Managing Director Asia, Tax and Accounting, BoardRoom Group, explains why: “We often see clients dealing with different functional currencies that differ from their reporting currency,” says Eunice. “This adds complexity when working across multiple regions, as managing transactions in multiple currencies simultaneously – along with fluctuations in exchange rates – can lead to inconsistencies in financial reporting.”

These inconsistencies can have far-reaching consequences. “Inaccurate financial statements fail to reflect the company’s true financial position,” says Eunice. “This can mislead stakeholders, including investors, creditors and analysts, leading to poor decision-making and potential reputational damage.”

Payment cycles also vary significantly across markets. When companies lack standardised reporting structures, financial teams may struggle to meet month-end deadlines. Regional holidays compound these challenges.

“For instance, during Chinese New Year, countries like Singapore, Malaysia, and Hong Kong have reduced working days, which impacts regional reporting schedules,” explains Shuzhen. “Yet global headquarters still expect reports to be delivered on the second working day.”

Despite the challenges, there are practical strategies and month-end close best practices your business can implement:

• Localise ERP systems: Ensure ERP platforms are adapted to meet local compliance needs.
• Harmonise the chart of accounts: Establish a standardised account structure to facilitate smoother data consolidation and reporting across regions.
• Monitor regulatory changes: Continuous monitoring and adaptation are essential to handle frequent updates to local regulations.
• Develop a regional reporting calendar: Align reporting timelines with regional holidays and payment cycles to prevent conflicts and reduce pressure on finance teams.
• Integrate data processes: Address data silos by improving system integration. Reporting delays can stem from manual data manipulation due to poor system harmonisation.
• Invest in staff training and development: Equip finance teams with ongoing training on the latest accounting standards, regulatory updates, and financial reporting best practices.

With the right processes in place, finance teams can streamline month-end close activities and maintain confidence in their financial operations.

Many multinational companies opt to establish shared service centres (SSC) to centralise finance operations. While this can improve efficiency and reduce costs, it is not without challenges.

Shuzhen cautions against the risks of centralisation without localised knowledge: “Companies often set up shared service centres to streamline processes and save costs,” she says. “However, they sometimes forget that regulatory knowledge is essential. For example, if the accounts payable team in a central location isn’t aware of local withholding tax requirements, they might process vendor payments incorrectly, leading to compliance issues.”

To ensure SSC functions effectively, companies should either retain some level of local expertise within the finance team or partner with professional service providers with in-depth regional knowledge.

Another key factor in achieving a seamless month-end close process is leveraging technology.

Eunice highlights the increasing need for e-invoicing compliance: “With e-invoicing mandates becoming more common in jurisdictions like Malaysia and Singapore, finance teams must integrate API-driven solutions,” she says, highlighting the increasing need for e-invoicing compliance. “Without automation, compliance is difficult, and errors in reporting become more likely.”

In addition to e-invoicing, investing in multi-currency, multi-region accounting software can significantly improve the closing process.

“These tools can automate report generation, align with different accounting standards and reduce errors when converting reports between frameworks,” adds Eunice.

By combining centralised operations with localised expertise and automation tools, finance teams can create a month-end close best practice framework that enhances efficiency and accuracy.

Beyond the operational challenges, the financial risks can be significant. Late filings can incur penalties, while inaccurate tax submissions may trigger audits or result in missed opportunities to claim deductions.

“If there’s improper closure, discrepancies may arise in financial data during external audits,” explains Eunice. “This can result in a qualified audit opinion, or worse, a disclaimer causing reputational damage and closer scrutiny from regulators.”

The financial consequences don’t stop there. Shuzhen warns of costly auditor overrun fees, explaining: “When audits extend due to improper closures, auditors charge additional fees, creating a domino effect of penalties and delays.

Additionally, inaccurate financial statements can mislead stakeholders such as investors and creditors, resulting in poor decision-making and damaging the company’s reputation.

By understanding these challenges, companies can proactively plan and implement strategies to mitigate risks while ensuring compliance.

One of the most effective ways to streamline year-end closing is to start preparations well in advance to prevent last-minute bottlenecks. Allocating tasks across the team and engaging external auditors or tax advisors is essential.

“Early preparation also ensures ample time for reviewing financials and resolving discrepancies,” explains Shuzhen. “The key is to plan in advance and allocate tasks across the team instead of rushing everything at the last minute.”

Start by scheduling the audit timeline months ahead of deadlines and assembling critical documentation early so you avoid last-minute scrambles when regulatory cutoffs loom.

Conducting monthly or quarterly account reconciliations reduces the workload at year-end, avoiding last-minute adjustments. These regular reviews are not only for year-end closing procedures but also play an important role in proactively managing tax and the company’s financial position.

“Tax returns follow statutory timelines, but what is more important is preparing tax provisions on a regular basis,” says Eunice. “This helps highlight deductible items and income levels early, allowing companies to plan their tax strategy rather than rushing at year-end.”

Maintaining a recurring audit schedule throughout the year also helps businesses reduce the burden of additional work during year-end close. Shuzhen explains: “By maintaining a schedule on a monthly or quarterly basis, you minimise the number of last-minute adjustments,” she says. “This also reduces additional work by keeping documents ready for auditors in advance.”

Analytical reviews of financial statements, such as monitoring gross margins and financial ratios, are another critical component. “Finance teams should do analytical reviews more often rather than waiting until year-end,” says Shuhzen. “This is so they can provide more updated information and rectify issues early. This ensures teams have a clear idea of how the business is doing before year-end.”

Automating routine tasks like reconciliations and reporting can save significant time and reduce errors. “Automation tools eliminate inefficiencies and ensure real-time financial insights, which are crucial for accurate reporting,” advocates Shuzhen.

Tools like cloud-based accounting software can simplify workflows and ensure data accuracy. Automation, in turn, is critical to helping businesses meet submission deadlines and avoid costly corrections.

Regular updates on financial and tax positions keep stakeholders informed and reduce last-minute queries. This also has additional benefits, as Eunice explains. “Senior management will always ask, ‘What is my tax position? Are we paying tax, or are we in a tax loss position?’ Instead of waiting until year-end, finance teams should provide monthly or bi-monthly tax position updates so that stakeholders are well-informed ahead of time.”

This fosters transparency, strengthens trust and ensures the company is aligned on financial priorities.

Changes in accounting standards, tax legislation and financial reporting requirements can significantly impact year-end closing. “Throughout the year, companies must track updates in tax rates, deduction rules and reporting requirements,” says Eunice. “Failing to account for these changes at year-end can lead to incorrect filings and potential penalties.”

Engaging tax advisors and specialists like BoardRoom will ensure the company’s accounting and tax filings align with the latest statutory requirements.

Use the year-end closing process to reflect on what worked and what didn’t to improve future years. “A post-mortem review allows businesses to evaluate challenges, identify opportunities for improvement, and streamline processes for the next financial year,” recommends Eunice.

Involving cross-functional teams in a collaborative review process to gain a 360-degree perspective can help uncover hidden inefficiencies and pave the way for a smoother year-end close in the future.