Our recent benchmark research into the practices of the Office of Finance and the challenges it faces finds that only a few more than half (53%) of companies complete their monthly close within six business days and even fewer – just 40 percent – do so for their quarterly close. However, these numbers may overstate the percentage of companies that really close within a business week. Originally the stated objective was a fast, clean (error-free) close. Now, in order to achieve a one-week benchmark, some departments may “close” within a week but then routinely take additional days to address material issues that often involve time-consuming accounting adjustments. These departments are fooling themselves. They need to address the same issues as the departments that take longer than a week to close.
We use the term “continuous accounting” to encompass three management approaches that enable finance organizations to achieve steady gains in effectiveness: managing workloads continuously across periods, using software to manage finance department processes in a continuous, end-to-end fashion, and continuous improvement. Continuous accounting underlies these five key requirements for accelerating a company’s close.