Accelerate Your Accounting Close With Peer Best Practices

To achieve a more efficient accounting close, define close activities and effectively leverage technology.

The accounting close challenges controllers

With manual processes, limited visibility and massive quantities of transactions, controllers often struggle with the accounting close. Few businesses have the means to successfully monitor close activities in real time or rapidly respond to problems as they arise.

To address this challenge, organizations need a “connected close,” a set of tasks and activities with connected metadata and configured with the right finance technology, led by a team with advanced digital skills.

Reduce the Length of Your Accounting Close

Take a cue from leading companies to shorten your accounting close to fewer than seven, five or even four days.

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    Accounting close best practices hinge on four key pillars

    To excel at the monthly connected accounting close process, follow these four proven best practices.

    Build an accounting close checklist

    Start by detailing the various activities involved in your accounting close process. Tailor the list to your organization’s unique needs to gain visibility into both key milestones and detailed tasks:

    1. Separate activities according to category: recording financials, reconciling, closing and consolidating, and reporting.

    2. Divide each category into common activities, such as general ledger and subledgers.

    3. Further divide each activity into specific subactivities and tasks.

    4. Structure the tasks in a hierarchy, specifically a parent-child relationship. This helps team members easily make updates and identify bottlenecks. It also improves visibility, reporting and analysis.

    Analyze the close process in detail

    After documenting the accounting close, examine it to identify issues and inefficiencies. For example, delays and missed deadlines are a sign of problems in the close pipeline that might be resolved through greater automation. 

    Conduct scenario planning around risks and potential consequences in the accounting close process using a risk bow-tie analysis, which visually organizes complex risk scenarios into a single intuitive diagram.

    Leverage automation for close management

    To begin to automate close management, controllers have three options:

    • Build a connected close software application that uses techniques such as robotic process automation (RPA) to improve accounting efficiency and accuracy.

    • Enhance an existing enterprise resource planning (ERP) system to provide close task management. This sometimes requires purchasing an add-on module.

    • Install a financial close and consolidation solution (FCCS), a separate application that integrates with ERP software to manage your organization’s group close, consolidation and reporting processes.

    Invest in the right accounting workforce

    Using cutting-edge tools for the accounting close process has ripple effects in that it helps attract and retain strong talent. Controllers who make the effort to hire and/or upskill a technologically savvy accounting workforce will be well-positioned to realize significant gains in speed, decision-making quality and efficiency.

    Accounting close FAQs

    What is accounting close?

    Accounting close is the monthly process during which companies finalize their financial records, ensuring that they are accurate and compliant with regulations. This process includes reconciling various accounts, adjusting journal entries, preparing financial statements and reporting results to key stakeholders.

    What is close task management?

    Close task management is the process of managing and tracking the various tasks and activities involved in the accounting close process. Financial close and consolidation solutions (FCCS) may offer close task management as a core functionality. This includes configuring tasks and workflows, tracking task completion status, and providing real-time dashboards or portals for monitoring the close process.

    What is artificial intelligence (AI) for accounting close?

    In the near future, AI — including machine learning (ML) and generative AI — is expected to play an increasingly large role in accounting close. Use cases include:

    • AI for matching transactions (including one-to-one, one-to-many and many-to-many)

    • ML for assessing account risks and identifying anomalies in transaction data

    • Generative AI for drafting disclosures and narratives in financial statements

    Drive stronger performance on your mission-critical priorities.