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The Smart Financial Close

Market Insight from Dynamic Insights

Executive Summary

Ventana Research has conducted quantitative research on the performance of the finance organization over the last two decades. Ventana Research has focused on the close process because it is a key measure of finance and accounting departments’ effectiveness, and almost all midsize and larger companies regularly complete their financial close.

There has been general agreement since at least the 1990s that organizations should be able to perform this task within a business week. Our research on the financial close has consistently shown that companies with very similar characteristics (measured in terms of revenue, number of employees, location and industry) vary considerably in the number of days it takes them to complete their accounting cycle. The lack of connection between the structural conditions of a corporation and the time it takes to close the books suggests that the obstacles to a faster close are not innate but the result of poor process design and execution, insufficient automation of the process as well as choices made by finance executives. One of those choices is deciding — for whatever reason — not to close sooner.

 
 

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