Year Ends - How CEOs can help to reduce stress

Almost all of our lives are anchored by transition points. We have just lived through another annual Gregorian Calendar transition. Unsurprisingly transition often generates higher levels of activity which can easily become stressful. Higher activity can also be beneficial too; I spent the first 3 days of 2021 clearing out piles of un-needed paperwork and yes, I feel more positive as a result.

As a child, I was particularly anchored by the end of the holidays and the start of a new school term, even more so by the start of a new school year.

These moments engulfed me with feelings of sadness for my loss of freedom, mixed with excitement of sharing my holiday tales with my school friends, showing off shiny new clothes and pencil cases and taking on the new levels of work/responsibility that every school year progression brings. Such transition points are COVID-blurred today; evaporating transition points are mentally hard to handle, especially for our children.

I wrote “Gregorian calendar” on purpose because I sought to highlight that one person’s transition point may not be another’s. For example religious calendars differ, Chinese New Year is on Friday 12th February 2021 and similarly in business, different teams have different cut-off moments. In the business world, the last day of the calendar month is usually viewed as the cut-off date for everyone…..but it doesn't necessarily need to be. Cut-offs inevitably are a cause for heightened activity and if senior management chooses to enable some flexibility, this can help to significantly reduce the negative stress that is experienced within our finance teams.

Operational fInance people are anchored by regular transition points, month-ends or year-ends being of particular importance. The first few days of the new month are often filled with confusion, loose ends, missing information and unexplained problems. Add to that significant pressure, created by the system (reporting timelines) and then ramped up by humans, who themselves are under pressure from the same system.

It is easy enough to say that finance people’s job is to produce the accounts and given that they knew this at the start of the month, why should they complain when the work needs to be delivered. In some respects I agree with this but I also believe that it is vital for both the finance team and the wider business to come up with some sort of a plan to relieve the stress to some degree.

This is all about managing mental health within the workplace. We all are aware of stress and the negative consequences even if we don’t always know how to accurately calculate the cost. So what can be done?

From a top down perspective, it is important that the business has accurate numbers as early as possible. However it can be very helpful to allow finance to close the month a few days earlier for accounting purposes, so giving the accounting team a few extra days to work on the reconciliation of all the various numbers and still meet the reporting timelines set by the system. Managers need timely monthly numbers, but not numbers for the month ending yesterday. Finance can help themselves too, by starting earlier. I often write about weekly reconciliation of the Prime Ledgers (Cash, Purchases, Sales) and it really does make an enormous difference in reducing the strain brought on by the pressures of month-end. If finance managers ensure these are reconciled every Friday, there is less to do on the month end.

Anyway, January is the time of Month-ends, let alone Year-ends for most of us in the finance profession. Best of luck to you in the coming weeks. Stay calm, be kind to those working with you and realise that the job will get done most painlessly if you work steadily, carefully and diligently.