The Fast Close, Part 1 (#16)

In this episode, we introduce the concept of the fast close, where the financial statements are produced on a vastly accelerated basis, usually in a single day. The main points covered in the episode are:

  • The soft close may be an option, where some closing entries are avoided in order to accelerate the closing speed, though at the price of producing a less accurate outcome

  • The main problem with closing the books is jamming too many activities into the closing period

  • The basic solution is to shift most activities out of the closing period

  • This solution can involve the use of more estimates, in such areas as reserves and accruals

  • Most actions can be completed a day or two in advance of the closing period

  • Can review financial statements in advance for errors, so that error correction activities are reduced within the closing period

  • Doing closing work early is less of a rush, so the results tend to contain fewer errors

  • Even if the results produced are slightly incorrect, it is usually possible to fix them in the following reporting period

Related Courses

Closing the Books
The Soft Close
The Year-end Close