Accounting Policies and Procedures Manual: A Blueprint for Running an Effective and Efficient Department, Fifth Edition

Chapter 9. Period-End Manual

Introduction

The users of a company’s financial statements—investors, lenders, and management—wish to see accurate results from the latest reporting period as soon as possible. In past years, these have been conflicting goals, under the premise that a rapid financial closing required the use of so many estimates that the results would be less accurate than those achieved after a prolonged wait. However, by using a carefully designed period-end closing manual, the accounting department can create accurate financial statements in short order. The author regularly issues 20-page financial statements within two days of the period-end, primarily by closely following a tight production schedule that is itemized in a closing procedure.

Period-End Manual

The keys to the success of this manual include its constant review and updating to achieve continual improvements in the closing process; careful delineation of the tasks required of each person; and shifting of closing tasks forward into the accounting period to be closed. By paying constant attention to these mechanics, it is possible to close the accounting records and achieve a high degree of accuracy within just a few days of the end of an accounting period.

An example of the period-end closing manual is shown in Exhibit 9.1. This manual is the master copy that is maintained by the controller, showing the work tasks of every person who is involved in the closing process. The left column of the exhibit shows ...