What’s the worst part about the month-end closing process? It happens twelve times a year. Its purpose is to ensure the accuracy of all business account balances and generate financial statements. While straightforward, this process is very time-consuming and error prone. Early-stage biotech ventures usually don’t have a dedicated team to oversee month-end and rely on off-the-shelf small business accounting software, such as Quickbooks or Xero, to get the job done.
Often a lone accountant, finance manager, or even a lab manager is responsible for the sometimes ten day or more monthly reconciliation process. The longer until close, the longer until executives can review the financial statements and course correct where needed before it all starts again. Streamlining the month-end process plays a direct role in strategic decision-making and speed to market for life sciences.
Biotech and R&D companies face specific month-end closing challenges which can be made easier by using a self-service eMarketplace, such as ZAGENO, to procure lab supplies.
5 Ways an eMarketplace Can Streamline Month-End Closing
- Automation of manual activities. ZAGENO easily integrates with small business accounting software, ERPs, and procure-to-pay (P2P) systems to automate manual activities such as purchase order matching, project code assignment, order tracking and returns, accounts payable, and spend classification. Procurement automation improves accuracy and reduces errors.
- Simplification of purchase order and invoice matching. Serving as the single vendor of record, ZAGENO offers cart-building from over 30+ million SKUs across 5K+ suppliers consolidated into one monthly invoice. Duplicate invoices or payments are proactively identified.
- Cost center assignments. By setting up approval flows in advance, spend is automatically assigned to the proper cost center and project code and instantly maps to the general ledger.
- Compliance. By serving as a digital repository of lab supply purchasing information, an eMarketplace helps keep the organization ready for audit by constantly building an audit trail.
- More effective budget utilization. Workflows can include budget restrictions to manage expenditures before they hit cost centers or quickly adjust after a potential budget overage is forecast. Already existing negotiated supplier discounts are pre-loaded and easily verified.
Since many biotechs are still without cash flow, earnings, or revenue, traditional financial analysis is not quite as effective as in other sectors. However, having an accurate snapshot of the company’s financial health is crucial to gauge its cash position and continuing ability to fund the R&D activities that will, hopefully, lead to future return on investment. By streamlining this process with the help of an eMarketplace, biotechs will have more confidence in their numbers and more time to devote to the actual work of world-changing discoveries.