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