Winning CFOs: Implementing and Applying Better Practices, with Website

APPENDIX C Month-End Bottlenecks and Techniques to Get around Them

These bottlenecks and techniques are sourced from a benchmarking study of accounting functions that has over 300 accounting teams from all sectors comparing their practices and achievements against one another.

Bottleneck	Proposed Course of Action
1. High processing at month-end	Push processing back from month-end by avoiding having payment runs at month-end. Better practice is to have weekly or daily direct credit payment runs but none happening within the last and first two days of month-end. The last thing you need is to receive a large number of invoices.
2. Intercompany adjustments	Ban all intercompany adjustments at month-end except for internal profit adjustments.
3. Closing off accounts payable	Immediately close off accounts payable on the last working day or, better still, noon on the last working day, with transactions in the afternoon carried forward to the first day of the new month. I have come across no company that can justify closing off accounts payable after the last day of the month.
4. Closing off the accruals	Close off accruals on day −2; see below.
5. Closing off accounts receivable, especially handling the last day’s sales invoices	Immediately close off accounts receivable on the last working day or, better still, noon on the last working day, with transactions in the afternoon carried forward to the first day of the new month.
6. Inventory cutoff, including the handling of work in progress	Make the cutoff ...