Speed and Quality of the Accounting Close
Consolidating and closing the accounting books is an essential core process for the Office of Finance. Efficient and reliable consolidation—the process of combining financial results from multiple legal entities and subsidiary companies—is essential for creating timely, consistently accurate corporate financial reports. Organizations periodically examine the software they use for consolidation to improve efficiency, enhance quality or accelerate their close.
The accounting close should be completed within one business week. This ensures that executives and managers get timely financial and managerial information on which to act. Our Office of Finance research finds that nearly two-thirds of those companies (62%) that close within six business days say they provide timely information to their stakeholders, compared to 39% of those that take longer. The research also finds that one-half (49%) of organizations take seven or more business days to complete their close.
When Finance and senior management decide they want to accelerate the close, make the process more efficient or improve its quality, they often examine how the financial consolidation software in use affects its close. This paper suggests a strategic framework for performing that examination and making subsequent decisions regarding any software changes.