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Hello,
I am the director of finance in a mid-size company. I am working on improving our month end procedures and would appreciate any advice. I am of course trying to strike the balance between too much and too little information.
I have started looking at the reports through a horizon of focus lens. 50,000 feet, top management reports, down to 10,000 feet individual account analysis.
I would appreciate and tools, templates, or ideas.
Have a great day,
Aaron
Month end close
Do you have a detailed close schedule? I mean really detailed, with inputs needed and output expected. For us that was key in weeding out all the needed prerequisites for each step and making sure they were scheduled in the proper order and also weeding out the non-value add work that was happining during that crunch time. For example one group was always late with Commission booking but once we realized they were waiting for final revenue numbers that are never available by the time the Commission entry was needed we were able to change the process so that the sales flash was used as the basis of the commission entry enabling it to be done over the weekend instead of on Monday.
I'm also a fan of stopping distribution of certain reports and seeing if folks ask for them. Especially things that are published but you never get any questions on. I generally advise to continue doing them for a few months but after that if the finance group isn't using them for analysis and no one else has missed them then I'd stop.
How long is your closing process now and have you already worked to reduce it? In the past few years we've gone from 3 days down to 1.5 days until our full P&L and BS down to the posting account level is ready and loaded in the corporate consolidation system. External and internal reporting is generally completed by Friday, with our Management Business Review meeting with the CEO and CFO on Friday. Unfortunately we do have about 10 - 15 folks working over the weekend each month end to meet this schedule. This is for a reporting organization with about $4B in annual revenue.
If you have specific questions let me know. My last role in this company was as Corporate Controller so I am very familiar with our close process.
Cathie
Month End Close
I suspect others might have a more sophisticated method but we started with a "shared" excel spreadsheet. Because it is shared everyone can have it open at the same time and make updates. We started out with a list of tasks that needed to be done. Then we added the responsible party. Next we organized by day. Once a task is done it is marked complete and the date is entered.
Month after month we modify and fine tune. Each month is a new tab so we can refer back to the prior month.
Recently we have added a scoring system so the team (and individual) can see how the month is going. We have identified bottlenecks, miss-allocated resources (ie does everyone have something to do or is one person overloaded).
It gives the team some ownership and has increased my ability to monitor the progress without seeming like I am micromanaging.
I would be happy to share a sterilized version of our spreadsheet if you shoot me off a private message.
Roger
I think the helicopter
I think the helicopter approach on Google Maps is great - I suggest this to all my clients
(drill down several levels)
Heather Smith
Month end close
Hi Aaron
As a Finance Manager for a subsidiary of a Global Financial Services giant where the Sub has turnover of £1.7bn ($2.4bn) I am very interested in closing calendars/timetables and I believe that the advice you have already been given is best practice. I would like to add the following to this discussion.
1) how have you got on in implementing your changes (and what were they); and
2) the advice I would like to add is to drive your closing calendar/timetable from the outputs that you want from it i.e. from compliance based (SEC filings etc) to MI (actuals v's plan etc) and then work backwards.
Very interested to hear how you have got on.
Regards
Gareth Hill