Living in the fast (close) lane is key. Doing more with less effort and less people as a result. Sounds impossible? It is not! It is just a way of doing things differently and better, leading to more efficiency. Imagine what you can do with the saved time.
A few hints: Closing the books with your team with Excel as a project tool and File shares as a way to store and manage your financial documents are two areas for great improvements.
Curious? Please read on and read how you can release resources from the finance processes. You will see it when you know how and where to be to look
Shift happens
In Finance everything has to be done quicker and better. A sheer impossible challenge isn’t it?
Wouldn’t it be nice if you could use scalable monitoring software? This type of software is available on the market. It can help you save substantial amount of time and money.
Work smarter, not harder!
Financial closing
Financial closing software is not well known yet, that’s why Finance teams stick to their known procedures and methods. Doing things twice with the same outcome will never lead to a different result. Three tries, you’re out…
Over 60% of organizations, from small sized to large companies still use their Excel driven process monitoring and overspent 75% too much time. The other way to reduce allocated costs is to review all tasks and remove waste tasks as “waiting for….”.
Going through the list of tasks using lean..
What is the status of your period end closing?
From publications of Deloitte, Ernst en Young, PWC & KPMG about Financial Closing and my own experience, having worked for over 10 years for auditor firms as EY, 14 years for global UK based companies and a number of years for lots of different companies I came to the following conclusions.
Reading from option 1 to option 4, risks in the closing process are reduced. The reduction is in sync with the lead time of the closing process
Closing processes in organizations
1. Closing process with highest risks, manual closing |
2. Bit more advanced: High risk, less vulnerable |
| Many human jobs | Partially manual process, better organized |
| High level deadlines without details | Strict coordinated process for tasks completion |
| Large number of tasks | Results from transactions corrected in transaction system |
| Large number of controls | Analyses of key risks |
| Large number of Excel tasks lists as checklists | Reviews of these risks |
| Closing tasks with focus on risk mitigation | |
| Priority on the high risks Monitoring of all tasks in Excel |
3.less risks by an improved and controlled closing process |
4. Ultimate situation: optimal process fast close with Financial closing software |
| 75 % automated closing proces | 90 % automated closing proces |
| Coordinated closing tasks | Large number of automated transactions |
| Introduction of preventive i.s.o.detective controls | Large number of controls – preventive and detective |
| Focus on review of controls on high risk tasks | Many checklists on completed control actions |
| Use an extensive set of analytical tools | Software that supports and controls the closing process |
| Closing tasks focused on risk mitigation | Continuous monitoring on progress |
In the ultimate situation the closing process looks like
- Lead-times end completion of tasks and actions show the risk reduction.
- Dramatic reduction in the leadtime of the Financial closing process to 5 days = Fast Close. Please compare with your current situation
- You have dramatically reduced the known risks.
- You have improved the quality.
- Your processes are now documented.
- You have created time for holidays , analytics etc.
- If you wish, you can express the savings in the closing process in money.
How much have you saved?
When you started with 15 days closing (slow Close) and you managed to reduce it to 5 days, you have saved 10 days, multiply it with the number of staff, number of entities and the average hourly rate and you know your saving.
That’s very simple isn’t it? No wonder US companies focus on Fast Close.
Tips for optimization of the period end & year end closing
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- Move non critical closing tasks into the period i.s.o. after the period
- No Errors/ first time right: Fix your problems and remove the great number of corrections
- Make a distinction between management reporting(MARAP) & financial reporting(FIREP)
- No surprises, inform your suppliers and customers what you want and ask them what they want , agree upon it and follow it up.
- Financial Closing is a high risk project and needs a strong and powerful project manager
- Select the proper closing tools and implement them!
- Follow up with the improvement of your primary processes form a lean point of view is highly recommended.
Question: can I start immediately with Fast Close? YES!
Deploy and install the software, collect information and improve continuously. Need some help, we are here to help you, we have been there and can help you with the lessons learned with other customers
Have a look at FastCloseManager, and read more about a Fast Close Monitoring tool and see if that can help you. Please feel free to contact me. André Salomons is owner of Financial Suite®, author of the book from Slow close to Fast Close, author for a number of publishers and speaker on the topics Fast Close and SharePoint. https://andresalomons.nl/contact-en/
(2034)
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