3 Drivers of a Successful Financial Close 

For organizations closing their financials for year-end or preparing for their first close of 2024, three key factors can drive success throughout the process. 

1. Clarity: Clearly defined processes, including tasks, roles, and deadlines.
2. Transparency: Status visibility during close and transparency into what’s working well and what’s causing delays.
3. Efficiency: Streamlined processes enabled through technology and automation.   

By prioritizing these goals, organizations can achieve time savings, speed-to-financial reporting, business performance insights, increased accuracy in results, and greater employee satisfaction. 
 
Let’s look at operationalizing this target state. 

Clarity: You Can’t Manage What You Can’t Measure 

An estimated 20% of companies take more than two weeks to complete a quarterly close, Ventana Research shows. Another 52% fall somewhere between one to two weeks. Completing a monthly close isn’t much easier, either. Finance teams still take about seven business days to close the books each month, equating to 90 days a year performing just this one task, according to a report from Sage. 

Clearly, there’s room for improvement. A few small enhancements to documentation and communication can shave time off the close cycle. 

• Don’t underestimate the power of a central, easily accessible close checklist. While a close calendar is a good start, only a detailed checklist with clear tasks, preparer name, reviewer name(s), target date, and actual completion date enables full clarity on assignments and progress. Capturing this level of detail also allows for a meaningful baseline and informs an effective close debrief on wins and improvement opportunities.  
• Clearly communicate policies and guidelines to support the process. Are leaders and reviewers clear on overall materiality thresholds for the close? Do the individuals preparing journal entries understand guidance on materiality to book for the month versus what can be trued up at quarter-end? Each team member should be clear on their individual roles, responsibilities, and expectations, in addition to any related dependencies for analysis, decision-making, forecasting, and other downstream processes.  

Transparency: The Engine of Accountability 

Better visibility into real-time financial data can surface insights leaders need for both operational and financial savings. For example, appropriate visibility into AP invoicing and processing bottlenecks allows for substantive discussions on establishing or updating the AP cutoff date. It also affords the opportunity to clarify and reinforce materiality thresholds to close the period. This is just one activity across the larger close process, but it’s representative of where transparent policies, standards, deadlines, and ownership relieve bottlenecks. 

• Document all key close tasks, preparers, and business unit/corporate reviewers. Once everything is on paper, it’s much easier to observe opportunities to shift tasks around, relieve constraints, and better balance workloads across the team during a stressful, time-intensive close process. This is priority one – lack of transparency is a persistent issue companies of every size face. A checklist, as mentioned above, and a close management tool, to be discussed below, can elevate transparency for all relevant stakeholders and serve as key benchmarks for improving close maturity. 
• Develop meaningful key performance indicators. KPIs improve transparency by highlighting performance gaps or achievements and enabling closer tracking of performance data. Finance and accounting leadership will be focused on measurement, so aligning KPIs to the type of criteria they most commonly seek is crucial. 
• Support finance and accounting leadership with visualizations and dashboards to easily access close status. This step allows staff up and down the chain of command to drill down into specific data sets, check on milestones, understand progress, and have more substantive discussions with other team members. By understanding the details behind bottlenecks and delays, managers can quickly work to remediate issues and course-correct without disrupting the close timeline. This transparency also supports meaningful post-close retrospective discussions on what to continue and where to improve for the next close. 

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Efficiency: Accelerating the Close and Related Reporting 

74% of finance professionals say they haven’t established an automation program within the close process, Controllers Council data found. Automation speeds up close, generates time savings, and accelerates financial and management reporting and insights.  

• Streamline the close process to remove or shift tasks that don’t need to occur during the critical path of key close days. Organizations are starting to complete less-risky tasks quarterly, semi-annually, or annually to remove the burden on the monthly close. Additionally, these staggered tasks are being spread so as not to create additional work on quarter-end and year-end reporting cycles. 
• Implement process automation and supporting tools and technology to unlock full close efficiency. Automating the financial close can triple the amount of time staff can devote to other strategic tasks. Over the course of the year, that adds up to saving the equivalent of 24 working days, according to Sage. Underlying data and related systems/sub-ledgers should be fully integrated. Journal entries, accruals, and reconciliations should be automated as much as possible within the ERP first and then supplemented with tools like FloQast, Alteryx, or Blackline as needed. If a close management tool is not in use, evaluate requirements against the cost of available tools in the marketplace to better understand potential ROI. Platforms like FloQast or OneStream are purpose-built for close acceleration. 
• Realize faster insights into financial and business performance. An accelerated close allows for faster financial and management reporting, deeper analysis, and more time for strategic planning and forecasting. This shifts the team’s focus from transactional activities to value-added activities. If business intelligence, reporting, and forecasting tools aren’t already in place, it’s worth evaluating tools like PowerBI, Tableau, and OneStream. Data outputs and KPIs from the close process can be automated as inputs into these reporting tools, advancing efficiency as well as supporting clarity and transparency. 

Close Fundamentals Matter 

Leading enterprises with well-staffed accounting teams and robust, integrated tech stacks are pushing the boundaries on speed-to-close, even achieving a state of autonomous financial close. For most organizations, however, close success hinges on going back to the basics of enhancing and streamlining process integrity and bringing a continuous improvement mindset to each close cycle. 

Additional investments in automation, artificial intelligence (AI), and cloud-based reporting platforms can only be effective when there’s a foundation of defined, streamlined processes and clean, accessible data. 

For clear, transparent, and efficient close workflows that deliver rapid value-add insights, contact CrossCountry Consulting.