If your close takes longer than five days, you’re not alone. In fact, less than 10% of the high growth companies that Connor Group advises are able to close in under 10 days—at first. So what are companies with a close that takes less than five days doing differently?
2. They consistently practice the ART of the Close, each and every month.
–VP and corporate controller of a recently public, high growth company
Getting to a better close starts with something so basic, so obvious, that it’s often overlooked: establishing what a successful close actually looks like. While everybody on your team knows what the close is, they likely don’t know what that means in detail.
3. All key balance sheet and P&L accounts are analyzed and reconciled
4. The P&L and balance sheet analysis is completed
5. Management reviews are performed
6. The reporting package is completed and submitted (excludes financial reporting for public companies)
7. Tasks one through six are completed in under five business days
Higher functioning accounting departments not only define the close differently: they follow a system that helps them complete all seven steps every month. At Connor Group, we call this practicing the “ART of the Close.” The acronym stands for Accuracy, Reliability, and Timeliness. In practice, the ART of the Close ensures that
Timeliness: the close is completed in an efficient manner and within five days or less.
Transcribed digits, broken cell formulas, and even simple fatigue during the frenzied close period put financial results at risk. Improving accuracy requires implementing processes and controls that support teams in getting the numbers right and feeling confident in what is produced.
A caveat: While the goal is to have a close that is both accurate and accelerated, in the beginning you may have to work on one ideal. When it comes to your closing your books, quality comes before timeliness in both the dictionary and the close!