Research Perspective

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Fast-Tracking the Financial Close:

Accelerate the Process and Reduce Risk

A Fast Close Demonstrates Effectiveness

It’s generally accepted that companies should be able to close their books within a week of the period end, whether monthly, quarterly or semiannually. Yet our recent benchmark research shows that only half of participating organizations accomplish this within five or six business days in their monthly close; even fewer – just 38 percent – can do it for their quarterly or semiannual close. Companies that take more than a week need to address this issue for a number of reasons beyond the fact that a fast close is more efficient and gives executives vital information sooner.

How quickly a company closes says much about the overall effectiveness of its finance organization. Our research shows that nearly identical companies (those that are similar in size, industry, ownership structure, centralization of accounting and number of ERP systems, among other factors) can differ considerably in the lengths of their closing processes. The disparities most frequently reflect differ-ences involving process management and software; those that close more promptly are more likely to employ a continuous-improvement approach and to use software designed to support a fast, accurate process.

 
 

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