It’s the year-end hustle again. The auditors are coming in the next couple of weeks and you’re jamming to get the books closed and the numbers tight. This is always a great time to test your month-end closing process.
We all know the importance of a solid closing with speed and accuracy. We need to have instant information that we can rely on to help us make the best decisions possible. However, closing monthly, quarterly and annual financial statements is a challenge for most businesses. The majority of the businesses I visited last year did not have a solid closing process in place and any improvement, frankly, would be helpful.
The ideal close should take 10 days or less. I prefer five. Anything over 20 is competitively worrisome. Research shows that companies that take 10 days or less spend 50% less than those who take more than 10 days.
Here are are 10 tips to speed up and improve the accuracy of your month end closing.
- Use a month-end checklist.
- Assign ownership of the financial reporting.
- Implement a reporting calendar.
- Standardize your closing schedules, reports and review process.
- Start analyzing general ledger accounts before the month ends.
- Identify the hurdles that are slowing the process down.
- Don’t passively wait for info.
- Minimize month-end JE’s.
- Implement journal entry templates.
- Keep transactions up to date in real time.