6 Top Tips for a Smooth Financial Close

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6 Top Tips for a Smooth Financial Close

1 Orchestrate the process from top to bottom

A smooth close demands that all the figures come in at the right time, so standardised processes and schedules ensure that your colleagues in far flung places know what to deliver and when. Use workflow tools to define and monitor those processes.  Closely monitor reporting entities to ensure that your guidelines are a) workable and b) being adhered to.  Look to continually optimise the process.

2 Get involvement, ownership and transparency of the process

Show all those involved in the process their impact on the close.  Ensure that they understand how their delay might impact the whole process, and provide a way for everyone to understand progress against the plan.

3 Avoid duplication

Spreadsheets are an accountant’s best friend and a financial controller’s worst nightmare.  The situation of having more than one version of the truth – all too common when relying on spreadsheets – is one of the biggest problems when consolidating accounts.  Look to reduce or remove that reliance on spreadsheets, but make sure that this doesn’t mean you continue to duplicate data in other systems.

4 Remove technical barriers

Look to remove any problems with data feeds from disparate systems/locations.  Check that everyone involved in the process has the means to transfer data in the right format at the right time.  In a 2011 survey by Ernst Young, the biggest challenge to improving financial close speed was IT systems.

5 Introduce automation as much as possible

Automating inter-company reconciliations, for example, can remove a whole chunk of work, and potential delay, from the process.  Think about automating other aspects too, like currency conversions, data loading and reporting.

6 Manage by exception

Establish an approval process with tolerances and limits built into the workflow to avoid examining the data at the micro-level.

And the benefit of getting all of this right?  Reduced errors, reduced cost, reduced time.  In the Ernst Young “Closing Excellence” survey in 2011, they measured speed to close and whilst the fastest 20% of companies take 4.2 days per month to complete their financial close, the slowest take 8 days or more.  What could you do to improve the business if you could spend less time closing the books and more time being proactive?

What next

“Controller has provided us with the robust reporting environment we need to support the business as it has grown from a start-up to an established platform operating in multiple markets with multiple currencies. It enables us to manage our risk and report on a timely basis each month to our investors.” Tom Greenwood, Group Finance Director, Helios Towers Africa

We’ve helped over 100 companies move from spreadsheet hell to consolidation heaven, saving them time and money and improving their analytical capabilities along the way.

To discuss whether we can do the same for you contact us

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