Posted on

Time Is Money — How to Speed Up the Financial Closing Process

A Business 2 Community article written by Alan Boyer, VP of Professional Services, Akili Inc.

It takes an average of eight days for an organization to complete the quarterly financial closing process, a half-day longer than just nine years ago. However, a speedy, but efficient, close helps management understand its organization’s financial health and make important decisions in a timely manner.

Accurate financial statements are essential for all organizations, and it is up to management to create processes that ensure accurate and timely reporting. Time is money, and shortening the closing process brings big advantages.

Why an Early Closing Matters

A survey by SAP and Deloitte indicates that company leaders want to close their financials much faster than average. The reasons varied, but most revolved around time — 44 percent wanted more time for analysis and auditing before financial statements were published; 31 percent wanted to reduce time and costs associated with closing; and, 13 percent wanted to push management and financial information out as quickly as possible.

Companies often make better decisions during a shorter closing process. When financial statements are created in a timely manner, they can be used to build forecasts and accelerate innovation. An early close also makes the accounting team more analysis-driven, rather than holding them in a scorekeeper role. And it reduces workload and creates more effective transaction processing.

Barriers to an Early Close

Company executives blame slower financial closing times on a variety of factors. According to the same survey, 40 percent of executives say it’s because of internal levels of review; 35 percent say it’s a growing need to identify and consolidate more detail for financial statements; and, 20 percent say it’s because more time is needed to check for errors.

Financial analysts only spend about 23 percent of their time on value-added analysis to the business. Speeding up the closing process helps analysts and others better utilize their time.

Efficiency and accuracy are essential in a closing, and many companies want to overcome these barriers and speed up their closings. The following three steps can increase the time, accuracy, and efficiency of a financial closing.

  1. Use an Automated Process

Too many manual steps in a closing can slow down the process. Using an automated system is essential for speediness. Forty-three percent of the companies that complete their monthly close in four or fewer days use an automated process. Additionally, 27 percent use some automated processes and 16 percent use little automation or none.

A highly automated system allows companies to close more than three days earlier than those not using automation. A consolidation software or enterprise resource planning system used to manage a close makes companies twice as satisfied as those using desktop spreadsheets as their primary tool for the closing process.

  1. Make It a Company Priority

Making a speedy closing process a top priority for the company will ensure that everyone involved has this in mind as they perform their daily tasks. Planning for a fast closing will also make the company run more efficiently.

When companies establish a clear program to reduce a closing timeframe, with management buy-in, they accomplish their goal 77 percent of the time, according to SAP and Deloitte. A clearly stated objective to close more quickly usually results in meeting that goal.

  1. Conduct a Post-Close Review

Assessing internal processes during the closing process, and afterward, identifies problems and areas that need improvement to speed up the close time. The review can also identify any overlapping of duties or redundancies in the process, which will create efficiencies within the company and potentially save money.

Automation, making speed a priority, and identifying ways to reduce the time associated with financial closings are ways companies can eliminate barriers to timely closings. Time is money, and these solutions promote speed, leading to potential cost savings, efficiencies, and better financial decisions in the long run.

19 thoughts on “Time Is Money — How to Speed Up the Financial Closing Process

  1. This is really useful, thanks.

  2. Thanks to the excellent manual

  3. Thanks for the terrific article

  4. This is really helpful, thanks.

  5. Thank you for the terrific article

  6. As a Financial Analyst, speeding up the closing process gives me less time for review of my work. I just have to hope that it is correct or find errors during Account Reconciliation.

  7. I¦ve read a few excellent stuff here. Definitely worth bookmarking for revisiting. I surprise how so much attempt you set to create any such fantastic informative website.

  8. good article very hopeful

  9. Enjoyed reading through this, very good stuff, thanks. “A man may learn wisdom even from a foe.” by Aristophanes.

  10. I added a new list. As you’ll see it’s bigger than most of them. I hope you all have had a great week!

  11. I simply want to mention I am just newbie to blogging and site-building and definitely enjoyed you’re website. Likely I’m want to bookmark your blog post . You certainly have fantastic writings. Bless you for sharing your webpage.

  12. It’s been a busy week for you. What’s the best way to get rid of the stress of a busy week? The best and only way is by spending some time with the beauties over at http://www.camgirl.pw These are the girls who know how to treat a man right.

  13. Are you searching for a little fun? If you are, then http://www.camgirl.pw is the best site for just that. You’ll find plenty of hot babes there who love to get down and dirty. That’s exactly what you’re looking for right this very second.

  14. A good time is what you’ll have with the girls at http://www.camgirl.pw. This is by far the most exciting site on the entire internet. Don’t think twice about visiting this site. Not if you’re in the mood to have a little kinky fun.

  15. Take a good look at http://www.camgirl.pw This is the one site where you can have a lot of fun. The fun you can have here is exactly what you’re looking for. Enjoy yourself and meet some sexy ladies in the process.

  16. Are you looking for love in all the wrong places? There’s just one site where you can meet all kinds of local singles. There’s never a shortage of girls at this site. By far the best part is, you can go on a date tonight. Hook up here https://t.irtyc.com/awx9mr337k?aff_id=29696&offer_id=3788&nopop=1 and start the day off right. Before you know it, you’ll be in love and hearing the birds sing once again.

  17. I loved as much as you will receive carried out right here.

    The sketch is tasteful, your authored material stylish.
    nonetheless, you command get bought an impatience over that you wish be
    delivering the following. unwell unquestionably come further formerly again since exactly the same nearly very often inside case you
    shield this hike.

  18. I’m keen on the particular strategies people give on your own articles or blog posts.. video youtube terfavorit I will bookmark your own blog site and have a look at again listed here frequently. We’re a little specific I will be explained to a lot of brand new goods right here! All the best . for!

  19. Your blog on Time Is Money ??? How to Speed Up the Financial Closing Process – akili is very good. We hope you can continue posting many more blog in the future. Viva akili.com

Leave a Reply

Your email address will not be published.