Last year I wrote the book Accelerated Financial Closing, and co-authored a white paper with Deloitte (5 Signs That Your Financial Close Process May Be Broken). This year, with a little help from my friends, I thought I’d kick off 2015 with a blog series.

The accounting and financial close process is an ever changing mandatory process. Some call it close to disclose, some call it record to report (R2R), some don’t call it anything but just do it. Organizations with a December 31 year end close have either finished or are still working on their annual close now, which is the biggest one of them all. As with any process there were bound to be bumps and hiccups along the way. Now is a perfect time to review how the annual close went (or is going) and try to identify areas that can be improved.

There are many dimensions to the financial close, three of which are people, process, and technology. While analyzing areas for improvement, each of these areas needs to be assessed. Do my people have the right skills for the tasks they are doing? Could they be better utilized doing other tasks? Are my processes documented? Are they effective and efficient? Am I leveraging technology to automate tasks where possible?

 

And all of these depend on each other. As Bill Gates so eloquently put it, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

The financial close process itself also has many different steps. We have been working with our customers and analysts over the year trying to compartmentalize some of the different steps to make it a bit more consumable and have developed the following diagram.

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As such, my colleagues and I will be writing a series of blogs to walk you through each of the boxes here in more detail with suggested ways of improving each. Our weekly, 12-part series will cover the following topics:

 

  • Accounting – Simple Finance
  • Accounting – Lease Administration
  • Accounting – Revenue Recognition
  • Entity Close – Intercompany Reconciliation
  • Entity Close – Account Reconciliation
  • Entity Close – Entity Close Management
  • Corporate close – Consolidation and Notes Management
  • Reporting and Disclosure – Reporting and Analysis
  • Reporting and Disclosure – Disclosure Management
  • Financial Close Governance
  • Close to Disclose Recap

  Hope you enjoy!

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