Month-end close can seem like a daunting several days, but it certainly doesn’t have to be. As long as you plan out a detailed and organized month-end close schedule that optimizes the time of all involved, you can stay on track to meet management’s goals and expectations for timely and accurate financial reporting. To help you refine your month-end close schedule, here are 7 tips and a few lessons learned from the field:
1. Identify dependent activities.
Identify the activities that need to be completed before other tasks can start. Add a column on your month-end close schedule for these dependent tasks, and list them all out. For example, revenue should be finalized before starting to review A/R or calculate commission accruals, and A/P should be closed before reviewing prepaids.
2. Determine what tasks take the longest and prioritize them.
If a certain task takes several hours or even a few days to complete and review, it should be at the top of your list, unless of course, it is dependent on the completion of other tasks. Often, issues may arise during the completion of a task, and you want to have time to resolve them during the month-end close cycle without delaying the final close date.
3. Include review and analysis.
Your month-end close schedule should include flux analysis comparing the current period results to the prior period and/or the budget at least the day before the last day of the close. This ensures that you catch a missing accrual or other issues as early as possible instead of scrambling to research the issue right before final financial statements are due to management.
4. Flag activities that can be prepped or reviewed prior to day one.
Do you have recurring entries that haven’t changed on your month-end close schedule? If so, these entries can be booked ahead of time so that you and your team can focus on the tasks that cannot be completed before day one. Examples include interest expense on unchanged principal balances or any entries related to leases.
5. Be as detailed as possible.
Your month-end close schedule should include every task needed to complete the close and the steps necessary to complete the task. This ensures that nothing slips through the cracks. If there are three bank accounts that need to be reconciled, list all three on your month-end close schedule. Include a column for the status as well.
6. List the owners and reviewers of each task.
This step is important so that all team members have ownership of their tasks and a clear understanding of what is assigned to them. Daily team meetings to track progress are also important, and having tasks clearly assigned makes these meetings run more efficiently.
7. Map out the plan.
Include a column on your month-end close schedule for the day each task should be completed. Once you have detailed the close list of tasks, determined dependencies, and assigned the tasks and reviewers, the next step is to map out the plan and document the estimated day each task will be complete. This of course is dependent on the number of days in your month-end close. It might make sense to work backward, with the final review of financial statements being the last item on the list.
Regularly Review Your Month-End Close Schedule
Reviewing the close list frequently to add new tasks or remove obsolete ones is also key to refining your schedule. Doing that and following these tips can greatly improve the accuracy of your financial results and the efficiency of your accounting team.
Is your month-end close process bogging team members down and keeping them from other responsibilities? Contact us today with any questions, or visit our financial reporting and accounting services page to learn more. One of our consultants can help you refine a schedule and close more efficiently. You can also learn more about improving your month-end close in our free guide:
About the Author
Jennifer is a senior-level Finance professional with over 20 years of finance and accounting experience and over 15 years in the consumer product manufacturing industry. Prior to joining 8020 Consulting, she was Head of Finance for Buscemi LLC, a luxury shoe brand. At Buscemi, Jennifer led the implementation of NetSuite as the complete system of record within 4 months. Prior to Buscemi, Jennifer was the Corporate Controller of Dogswell, a premium pet treat manufacturer. She joined Dogswell as part of a turnaround team post-restructuring, which was successfully turned around and sold within 1 year. The majority of Jennifer’s career was spent at JAKKS Pacific, a $900 million publicly traded toy design and manufacturing company, where she was Vice President of Finance. At JAKKS, Jennifer was head of the FP&A and Royalties departments and acted as Interim Controller for over a year. Her work included both internal and external financial reporting, royalty audits, and preparing Board of Director presentations. She has expertise in building complex financial models, strategic planning, motivating the finance team, and improving efficiency. Jennifer holds a Bachelor of Arts degree in Business Economics with an Accounting emphasis from UCSB, an MBA from UCLA Anderson School of Management, and has passed all four parts of the CPA exam.