The Fast Close
One of the most common challenges for the controller is to close the month-end books and issue financial statements as fast as possible. The resulting statements are being demanded by corporate management,1 outside investors, and the Securities and Exchange Commission (for public companies) on the shortest possible timelines. However, the closing process has traditionally been a slow one—several surveys reveal that the average company requires about two weeks to close its subsidiary's books, followed by roughly another three weeks to roll up the results into corporate-level financial statements. Companies with more organized closing systems can reduce this process to about two weeks, while those companies with the best closing processes can reduce the entire interval to four days. These results represent a slight improvement in closing times over the past few years, but there is no massive improvement trend. Thus, companies are clearly having a difficult time shortening the closing process.
This chapter walks the reader through the process of closing the books and creating financial statements faster.
Different Types of Fast Close
Several variations on the fast close concept have appeared, causing some confusion about the nature of each one. The fast close is simply an acceleration of the standard closing process, resulting in approximately the same financial reporting package being issued (possibly somewhat stripped down). The focus of this approach ...