10 Steps to Speed Up Your Close

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.

We should be striving to operate in real time, with general ledger accounts continually accurate and reporting and analysis automated. This makes it much easier to close promptly.

Here are are 10 tips to speed up and improve the accuracy of your month end closing.

  1. Use a month-end checklist.
  2. Assign ownership of the financial reporting.
  3. Implement a reporting calendar.
  4. Standardize your closing schedules, reports and review process.
  5. Start analyzing general ledger accounts before the month ends.
  6. Identify the hurdles that are slowing the process down.
  7. Don’t passively wait for info.
  8. Minimize month-end JE’s.
  9. Implement journal entry templates.
  10. Keep transactions up to date in real time.
For now, evaluate your current closing process and system.  Are your 12/31/15 numbers ready for the auditors?  Looking forward, get a process in place and make it a priority to have quick, accurate numbers.

Happy New Year!

Happy New Year everyone! Ready for another lap around the sun? I am. I’ve spent the last couple weeks working on my 2016 planning, my goals and thinking about the changes I am going to make for the year. I hope you have too.

This week I spent some time to reflect on the past year–the good, the bad and the ugly. We need to put the year behind us, and look forward with intentional planning to accomplish big things this year. If you haven’t addressed 2015, do it. For many years, I wouldn’t contemplate the previous year, and never gave it the closure it needed. We need to get past the past. This year, I pulled out my calendar, my 2015 daily lists, and my journals; I made a list of the good and the bad things on one sheet of paper. My successes and failures had a couple themes that surfaced. I hope to work on improving these themes.

As we get our businesses ready for the year, we need do the same thing: reflect on 2015, put the past in the past, and look forward. We need to establish and write down our goals and objectives, and communicate our vision, plans and goals to the team.

Many of my new clients in 2015 said they had solid business goals and objectives and had communicated them to their team. But when pushed, most goals were not written down. And when meeting with the team, most team members were not clear on the objectives.

The power of just writing down goals and plans is amazing. The research show just by writing a goal on paper, you are 42% more likely to achieve it than if you don’t write it down. Just the simple act of writing on a piece of paper makes a huge difference. So get your business goals and objectives on paper now.

As we look to put the past in the past, we need to close our financial statements quickly so we know where we are. Establish your time-frame to have your year-end financial statements completed and ready for the auditors. If possible, have them wrapped by mid January. Obviously the timing is dependent on your business, but push to get closed as quickly as possible. List the good, the bad, and the ugly. Do any themes develop? Recognize your successes and don’t continue to beat yourself up for the failures. Put the past in the past and us it to slingshot into a successful 2016.