Closing Faster

This is the third in the series of posts about 2009 Finance System priorities following discussions with Rob Kugel of Ventana Research and the executive team from Star Analytics. After reviewing Resolution #1: Focus attention on more strategic activities and less on transactions processing, and Resolution #2. Improve planning effectiveness, here's the next area Kugel recommends that you consider.

Resolution #3. Close faster

"Our research shows that most companies that take more than five business days to complete their accounting close believe they can and should reduce the time this takes."

He adds, "There are many business reasons, including being able to present performance information to people in the business as soon as possible and having more time to spend on preparing reports presenting results to shareholders and regulators.

What changes are needed? "We’ve found there are many small process improvements companies can make, but it’s equally important to have an ongoing focus on finding ways to shorten the process. Along with this, we also find that technology (too many spreadsheets) and data issues (it’s too difficult to combine data from multiple sources) can impede a faster close."

For more on this topic, check out Mark Smith's post on "Continuous Improvement in Finance" on BusinessWeek's Business Exchange, where he refers to the firm's "Fast Clean Close" research benchmark.

Stay tuned for the next resolution, laying the groundwork for effective performance management.