We keep you updated with the latest news from Martin Hood and helpful information whenever there is a change to employment or tax laws.
March 3, 2020
How quickly are most businesses able to close their books? Like every great accounting & tax question – it depends! How is it that large Fortune 100 companies can consolidate and close their books in several days, yet smaller privately held businesses can be months behind closing their books?
A simple, yet effective approach for month-end close would be to develop a standard checklist of all required procedures, workpapers, and steps to streamline and execute consistently month after month. Developing a repeatable process helps drive efficiency and provides a trail of the close process.
We often see where there is a single bookkeeper who does all of the month-end close procedures but doesn’t have anything formally documented. Unfortunately, people change jobs, move across the country, or have personal matters that require a leave of absence and the business owner is unprepared and left to find a solution. This will often cause disruption to the business, which can negatively impact the bottom line due to lack of staying current in collecting receivables, paying the rest of your employees, and not having an accurate, timely financial picture of the business. Having a month-end close checklist (and a processes and procedures manual) can minimize the impacts of a worst-case scenario above.
Martin Hood suggests that as a best business practice you should have a month-end close checklist that is sufficiently detailed. In addition, the checklist should be periodically updated for changes in process, systems, and people involved.
Not sure how to implement a month-end close checklist or what questions you should be asking your finance team?
Our firm has been helping clients for almost 40 years. We offer a range of traditional accounting and tax services, as well as filling clients’ temporary staffing needs for controllers/CFOs, finance transformation consulting, and process improvement. We would be happy to help you strategically review your finance function or provide a turn-key solution for your finance needs.