AvidXchange wants to make sure that you not only survive – but thrive – during your year-end closing process. That’s why we’ve organized a panel of financial thought-leaders and AvidXchange customers to share their personal best practices for a successful year-end closing. This live event, Tips & Tricks to Prepare for Year-End Close, will take place on September 21 at our new corporate campus located at the AvidXchange Music Factory. We’ll be providing lunch and offering tours of our new digs too. Plus, you’ll receive 1 CPE credit for attending.
This panel will share information about the tools and reports that they use to help them navigate this stressful time, along with best practices for keeping your team motivated during long work hours over the holidays. In preparation for the event, we sat down with panelist Bill Gilbert, Vice President and Corporate Controller of REDICO, to talk real estate, accounts payable automation, and best practices for year-end close.
Tell me a little about yourself and your company, REDICO.
Bill: Sure, my name is Bill Gilbert, and I’m the Vice President/Corporate Controller at REDICO, which stands for Real Estate Development and Investment Company. I am a licensed CPA and was a partner in a firm for 14 years before joining REDICO in 2000. I run the combined accounting and finance teams of around 24 people and am responsible for ensuring that internal controls and policies and procedures are best in class, sound and adhered to.
REDICO is going to be celebrating our 50th year in just a few months. We’re a national real estate development and investment, meaning we build buildings and retail centers. We also acquire pre-existing real estate and manage those assets. When I started 17 years ago, we had 30 employees and three computers. Now we’ve got 225 employees and offices all over the country.
We’re what I call a “big-small company.” We can react quickly to market changes with our size, and then we diversify. We’re cognizant of diversification and adhering to our three and five-year strategic plan. We want to be prepared for economic up-and-downturns so we can add staff or streamline our processes and reduce staff if we must. We run lean – our philosophy is “do a lot with a little,” and so we leverage technology to help us do that wherever we can.
Can you describe your company’s AP process before automation?
Bill: We’ve been AvidXchange customers since 2009, so we were an early adopter of accounts payable automation. Before AvidXchange, there was a lot of paper. We used Sage Timberline’s software, Timberscan, to try to eliminate paper. Timberline was great for construction, but we wanted the functionality for approvals or routing, so we decided to look around for a new accounting software and landed on MRI. We decided to replace and enhance our AP invoice processing and go paperless. We found out about AvidXchange, which was already integrated into MRI, and it was a great fit.
Did you find you had to constantly track people down for approvals in the old paper-based system?
Bill: Oh yeah. In that paper-based environment, things would get lost or sit on someone’s desk for a week, get tossed in a briefcase, or something like that. The approver might be traveling, and we wouldn’t have any visibility into the invoice or its status. We found ourselves reacting to vendors requesting payments for invoices we didn’t even know existed.
How did accounts payable automation improve that process?
Bill: AP automation creates a captive environment. You have visibility into every invoice – there’s more transparency. It can’t get lost. It’s in the system. AvidXchange’s Invoice and Payment solutions have improved our controls and vendor compliance, which allows us to streamline the invoicing and payment processes to get real-time insight into our purchasing.
What was your year-end closing process like before automation?
Bill: The AP team would have to take a whole week around the holidays to get things back in motion and reset for the next year. In a paper environment, you’re moving documents into vertical files and then, at the same time, you’re moving documents from vertical files to permanent storage and then destruction. This is a time-consuming routine, creating maps and figuring out where all these documents are and moving them from one storage area to another.
We’re lucky that we’re a real estate owner and developer. We’re not paying for a space to store documents, but for many of our tenants, that’s a pain point for them. So, while we would like to collect the rent as much as we can, we also recognize that you know, it’s not a good use of money to pay to store documents. And move them around when they could all be stored in the cloud through AvidXchange.
How did the process change in 2009 when you implemented AvidXchange?
Bill: I don’t lose a week of folks tracking, boxing, and moving paper around! We can move from one year to the next with really no disruption at all. It’s a smooth transition – we don’t even have issues with employee morale or anything like that because there’s very little overtime associated with the year-end closing process now.
Do you have any best practices or general advice regarding year-end close?
Bill: Regarding AvidXchange, we run a report in Pay for 1099-MISCs that shows vendors paid via virtual credit card (VCC). This amount is deducted from the 1099 amount in MRI to give us accurate numbers. As for the master vendor file, consolidate all your vendor data, standardize company names, addresses, and other vendor information based on global standards.
Most master vendor files — ours included– are messy. Limit the number of people with access, and for each vendor don’t create a new vendor ID for different remit-to addresses (i.e. AT&T, government offices). If you haven’t used a vendor in the past 12 months, it’s best to remove them from your master vendor list. If the supplier is archived, then their information can be easily accessed for reinstatement.
Around the year-end, we used to bring in temporary staff and extra helpers to handle 1099-MISCs, but we haven’t had a need to do that for years. Don’t allow people to skip over the employee identification number (EIN) or input “999999” or whatever in the EIN field just because they had to process an invoice. By keeping your records standardized and updated regularly, you can go into year-end with the most accurate information possible. I would encourage anyone that operates in the environment to be current and thorough. Consistency is key – if everything is maintained properly, a year-end close shouldn’t be any more stressful or time-consuming than your standard month-end close.
