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Continuous Close and Why It Matters

Continuous Close: The Move to Real-Time Accounting

Gone are the days of waiting for month-end numbers. Accounting Today sums it up: it is no longer “business as usual,” it is “business now.” As companies adopt this new sense of urgency, there is a growing realization of the important benefits to be gained from a continuous closing of books (also referred to as “continuous accounting” or “daily close”), including the daily recognition of revenue and cash flow, timely reconciliations, early detection of errors or theft, and ultimately aiding the ability to make strategic, data-driven decisions based on real-time information.

In essence, a continuous close is like a “rolling” close. The practice helps to keep the company’s financial books up to date, and near ready to close them at any point in time. This approach to continuous accounting presents the opportunity for an ongoing “soft close” that more evenly distributes the workload throughout the month rather than waiting until the end of the period to make adjustments, settle intercompany eliminations, and complete consolidations. Continuous accounting has a two-fold purpose: 1) to provide executives and other decision makers with accurate, real-time financial data when they need it, and 2) to make the month-end “hard close” exponentially faster, easier, and more accurate.


The Urgency Factor: The Drumbeat is Getting Faster

Most accountants are familiar with the typical cadence behind a traditional financial close. At the end of the period, all data is uploaded, intercompany reconciliations and eliminations are completed, consolidations are performed, and once approved, the books are closed and final reports are issued. There are weeks’ worth of tasks included in this synopsis, and while it may not always be enjoyable, it is predictable and driven by clear processes.

Typically, executives get their first clear vision of performance several weeks after the end of a period, whether that be monthly, quarterly, or annually.

Yet few of us know of an executive who is willing to wait three weeks for anything! Modern, competitive businesses just cannot operate that way.

As highlighted in this whitepaper on modernizing the financial close, “the constant drumbeat of competition, combined with the persistent scrutiny that regulators and other stakeholders apply to financial results, leaves little room for financial close and reporting processes that require an overabundance of patience or are lacking in clarity and precision.”

Of course, nearly every results-oriented finance professional can see the enormous benefits of a continuous close. But as you’ll read below, the ability to achieve this vision is a lot easier said than done.


Continuous Close: The Move to Real-Time Accounting

Not so long ago, the need for the accurate, real-time information that is provided by a continuous close was limited to the financial services sector (banking, for example). Today, companies spanning every industry are rapidly understanding the benefits of a continuous close, which ultimately results in a much more efficient and accurate month-end close. But there is one mammoth obstacle standing in the way of achieving this goal of a continuous close, and that is technology.

Many accounting systems are not built for such efficiency. Companies oftentimes find themselves between a rock and a hard place. At one of end of the spectrum is an enterprise accounting system that was built without anticipating the need for real-time, continuous close accounting and is therefore too rigid to adapt. At the opposite end is a more nimble, modern accounting system that lacks the infrastructure to process the high volume of enterprise-level transactions (aka scalability).

Flexi is a rare accounting system that delivers the best of both worlds. From its beginnings over 30 years ago, Flexi was supporting one of the world’s largest banks with the ability to process billions of transactions, convert global currencies, consolidate multiple entities, and provide continuous close capabilities – all with extreme precision, speed, and security.

All to say, we know a thing or two about delivering technology that perfectly enables a continuous close process. We’ve drawn upon this knowledge to provide a summary below of the most important capabilities to look for when evaluating accounting software vendors. At a minimum, a true, enterprise-level continuous accounting process must be powered by sophisticated accounting software that provides the ability to:

  • Connect all relevant data through a seamless integration
  • Automate routine tasks (“rules-based workflow automation”) with the flexibility to customize tasks and exceptions based on specific business rules
  • Pull data from different general ledgers into a standardized format
  • Quickly consolidate financial statements in real time
  • Convert multiple currencies into a common currency for reporting purposes
  • Easily generate and distribute real-time reports along with data visualization and analytics
  • Provide complete transparency including 24/7 access to detailed audit and compliance reports
  • Scale to unlimited growth potential, without compromising performance (speed or accuracy of transaction processing)


System Integration is Key

A continuous close must account for all relevant data, including data residing outside of the accounting system. The ability to easily integrate other systems and third-party applications with a company’s accounting system is mission critical.

As an example, Flexi’s customer and SVP of finance, operating in the hospitality industry, explains the benefits:

“We’ve integrated Flexi’s accounting system with our POS (Point of Sale) software so our [8,000 restaurants] can produce this information on a daily basis. They’re able to pull daily results not only from one restaurant, but also in aggregate across their entire company for deeper analysis.”

This continuous close process, which effectively conducts a soft close throughout the month, has cut the time it takes to close books by at least two weeks, sometimes more.

"[The restaurants] can now close their books in three days compared to the 7-14 days typically experienced in our industry."
That is nearly 5x faster than the competition!


Ready to Reap the Benefits of a Continuous Close?

Flexi’s robust accounting software is uniquely designed to enable a continuous close process, allowing customers to achieve in minutes what traditionally takes hours or weeks of time.

It would be our pleasure to share the Flexi difference with your organization. If you’re ready to experience all of the benefits that can be gained from a continuous close process, request a demo today.


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