The Fast Close, Part 3 (#18)

In this episode, we discuss more closing activities that can be completed prior to the end of a reporting period. Doing so can greatly increase the speed with which financial statements are created. The following points are made:

  • Calculate the interest rate on debt in advance. This is especially useful when no changes in the debt balance are expected near the end of the month.

  • Calculate accrued vacation in advance. This could be so steady a number that no changes are needed from month to month. A “use it or lose it” vacation policy makes the task easier, since the upper end of the accrual is capped.

  • Have billable employees update their billable hours throughout the month, so there is little left to do at month-end.

  • Reconcile accounts early, which also allows more time to research reconciling items. Late changes to accounts are dealt with in the following month.

  • Use a closing checklist that starts about 10 days prior to month-end, to make sure that all advance activities are completed on time.

Related Courses

Closing the Books
The Soft Close
The Year-end Close