The Fast Close Toolkit

CHAPTER THREEThe Components of the Fiscal Close

INTRODUCTION: THE FISCAL CLOSE process starts with: (1) Transaction Accumulation, (2) Reconciliation, and Sub-Ledger Close process component, and is pictured in the diagram below. It focuses on recording and reporting accounting transactions during a specific and defined period—monthly, quarterly and annually.

All activities that comprise the fiscal close are driven by cutoff dates that ensure fiscal results are accurately reported as part of the Close and Consolidation process.

The Corporate Close and Consolidation component is considered part of the fiscal close and consolidation process and includes the close of business units and the completion of the adjusted trial balance, and the first pass of consolidated financial statements. The “final mile” of the process is (3) the Analysis and Reporting cycle.

Components of the Fiscal Close or Record to Report (R2R) Process

CUTOFF DATES

Cutoff dates are a critical component of the fiscal close since they drive all the accounting activities that will be included in a specific fiscal period to ensure that the information in the financial reports for the company is accurately stated.

Here's a definition of a cutoff date.

In accounting, the cutoff date is the point in time that delineates when additional business transactions are to be recorded in the following reporting period. For ...