Accelerating the credit card close

The divisional controller of a publicly held multinational company is having trouble obtaining expense reports as part of his monthly close.  To make matters worse, his company has a 4-4-5 close, so some months contain four weeks and others five weeks.

His comments are:

"The killer item is American Express. Currently Amex cuts off around the 20th of the month. We get the invoices online on the 21st and send them out electronically to the individual cardholders. That way they get it via e-mail, even when traveling. Users complete an expense report for their Amex items and return them to us. This process often takes a week to get everything we need. Due to our odd month end, a month can end as early as the 23rd or as late as the 31st.  I’d prefer not to push back the Amex statement cutoff since that means we could be missing ½ a month of expenses on the long months, but it creates a crunch in short months. I’ve looked at online expense processing from vendors like Concur. I’m choking a little on the expense, but beyond that, I’m not sure how much time it would actually save us since the biggest problem is getting them from people.

We finally gave up on the stick approach and moved to a carrot and stick. Everyone who gets their Amex in on time and complete gets entered for a monthly $50 Amex gift card giveaway. Everyone not on time gets their name on a list that goes to the CEO.

I’m curious how other companies handle this."

Here are some possible solutions that I suggested:

  • "I find that the carrot does not normally work, unless it's a BIG carrot. Unless you've seen an improvement from the $50 drawing, you might want to drop it, or improve the odds of winning with multiple gift cards.

  • Key item: There are usually repeat offenders every month, so target them for special treatment. I assume they will NOT submit an expense report, so I immediately start hounding them as soon as they receive the statement. The normal escalation path is a direct e-mail, then a phone call, then the supervisor is contacted, then the CEO. Total warning period is four days.

  • The real problem for us is when people are gone for vacations during this time period, so we have everyone enter their vacation time in a company-wide Outlook calendar, and we then ask them in advance who should complete the report if they are not available. Better yet, they can access a partial statement on-line at the Amex site before they go on vacation, and send us the expense report in advance.

  • If we don't receive a report, we charge to default accounts, which are then routed back to the department manager for review and correction in the next month. However, this might not work for you if these are re-billable expenses."

Related Courses

Closing the Books 
The Soft Close 
The Year-End Close