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Are you feeling the pressures to close faster?

The pressure to close the books as fast as possible is higher than ever.

According to Adra Match, 90% of survey respondents said they feel they are under pressure to close faster, while only 39% are satisfied with the quality of their closing process and only 28% trust the numbers reported at their month-end closes. Another survey showed that less than 75% of survey respondents were able to close their books in six business days or less.

So what can be done to shorten the closing period? Who benefits from a shorter close?

Best practices for a faster close

If you’re feeling the pressure to close faster, there are a few best practices worth looking into.

Don’t wait to gather data

Don’t wait until the last minute to do every aspect of your closing. By asking departments outside of accounting to provide data throughout the month, and by spending incremental time doing daily or weekly closes, much of the data you need will already be ready to go by the end of the month–allowing you to close faster, and more accurately.

Save time by evaluating closing needs

Not all statements need to be closed on a monthly basis. Maybe some aspects of your close only need to be accounted for quarterly. Analyze your business needs and make informed decisions about what can wait to be closed to help save you time in the long run.

Use specialized software

Closing the books requires several accounting tasks that are time-consuming and tedious. With the help of the right software, much of these processes can be automated. For repetitive tasks that are repeated on a daily, weekly, or monthly basis, set parameters to run the required reports automatically to avoid spending time rebuilding and rerunning the data required.

Flip to future projections

Instead of analyzing the period after it happens, try projection and estimation. By forecasting, projections and estimates will become more accurate over time, allowing your business more credibility, deeper analysis, and better traction.

The case against a faster close

While pressure is on for faster closes, keep in mind that if closing faster jeopardizes the accuracy of your numbers, then it pays to slow down and solidify your data. CEB data shows that the average close has dropped from nine days to six. And, in the past few years, 90% of finance departments have included “shortening the accounting close” in their top priorities. In fact, CEB research suggests that top-performing accounting teams that provide better decision support tend to close slower.

The bottom line

If the pressure is on to close quickly, see if the above best practices can be implemented by your staff, but bear in mind that speed isn’t everything–accuracy is the number one concern of any organization’s accounting team.

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