Accounting Best Practices, Fifth Edition

Chapter 12. Financial Statements Best Practices

This chapter covers the best practices that can be used to issue financial statements more rapidly. This creation process can be one of the most convoluted and time-consuming of all activities, with a long time needed to complete a quality set of statements. When a long interval is regularly required to complete financial statements, it has two significant impacts: not allowing any time for the accounting staff to complete other activities, and an irate management team that never receives its information on time. These are serious problems that can be completely eliminated by the best practices noted in this chapter.

The primary purpose of the more than two dozen improvement suggestions in this chapter is to streamline the entire process of financial statement production. This is done in a variety of ways, such as completing some tasks before the end of the month, avoiding the bank reconciliation, and automating the month-end cutoff process. Most of these steps are simple ones and can be quickly and easily inserted into the existing process. A few, however, such as automating the period-end cutoff, require a significant amount of extra work and may carry some risk of providing imperfect financial information. Consequently, it is necessary to review each recommended best practice carefully and only use those that will most easily be inserted into the existing system without causing either a stoppage in financial statement production ...