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By John Orlando, CFO, Centage Corporation

A perennial financial planning goal for CFOs and controllers each year is to shorten how long it takes to close the month. In doing so, today’s financial professionals could empower resources to focus on strategic initiatives across the organization focused on improving efficiencies, driving innovation and enhancing the customer experience.   But most financial professionals are so bogged down in the traditional process they don’t have the time or bandwidth to make changes easily.   The following article outlines three practical steps to more efficiently close the books without sacrificing accuracy.

Step 1: Identify Your Motivator

Before you dig too deep into the metrics, you’ll want to really zone in on why you want to close sooner. The more precise you are about the reason, the better you’ll be able to articulate it to your team.

  • Are significant mistakes getting carried forward into the next month because they just weren’t noticed until after close?
  • Are you meeting filing deadlines by the skin of your teeth?  Is it the printing schedule, tax filings, or your 10-K reporting? Or all of the above?
  • Does having a small team mean restricting which balance sheet accounts you’re able to review at month end?

Step 2: Conduct a Review

It’s not just about getting done sooner. It’s about making sure you have enough time to complete the financial close activities, give sufficient time to the business owners to review the numbers, and for you to produce the reports that you need to run your business.  Here are a few metrics to consider:

  • Find your bottlenecks. Track the completion times of each activity then zero in on what looks out of sync. Are the accruals not being done earlier because of a backlog in A/P? Was the consolidation delayed because you didn’t receive timely reports from an overseas office?
  • Consider the current close deadlines. If the duration of time from the end of the reporting period to when the financial statements are issued were to be shortened, would something suffer?
  • Check the number of adjusting entries that were made. Are the main problems from posting mistakes or is it due to coding errors by a team member using an old chart of accounts?

Step 3: Implement the Financial Close Solution.

Now that you’ve identified the key time-consumers during close, it’s time to put some changes into action so you can see real results.

  • Prepare and review the close schedule as early in the month as possible to get your team all on the same page.
  • Communicate your timeline to all department heads so they take ownership of their revenue goals and expenses throughout the month. It will also encourage them to be timely in providing the data and operational reports your team needs to close the books.
  • Consider daily or weekly balancing for A/R receipts, A/P checks, and invoicing if you’re not already doing them.
  • Don’t sacrifice accuracy for speed. Meeting those deadlines is critical but doing so with bad data is worse.
  • Use technology to encourage collaboration and streamline the work. Consider what you’ve got and acquire what you need.

I am encouraged by the increasingly innovative role of the CFO to help steer the direction of business today.   However, with years of experience in this role, I know firsthand how hard it can be to free oneself from the shackles of day to day financial management to actively engage in those discussions. By taking time to proactively ask the right questions, leverage innovative technology and implement best practices, forward thinking senior financial professionals are empowered to expedite a time consuming but critical process.   In doing so, valuable resources will be freed up to support a number of “wish list” projects you likely have sitting on your desk designed to efficiently grow your business.

Global Banking & Finance Review


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