Making the financial close process smoother

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The financial close process is used to prepare the financial data of a company for financial statement presentation. The process centers on finalizing account balances in order to display financial data in the proper accounting period. It can be a complex process and usually involves many different employees, systems and processes within a company. There are several things that can be done to ensure an effective and efficient close process.

Communication

Communication is a key to implementing an efficient financial close process, especially for organizations that are spread out over many locations. Communication between accountants, department heads and management will ensure the process moves along smoothly. A best practice is to implement a financial close calendar so that everyone involved in the process is aware of key dates and deadlines throughout the process.

Documentation

Documentation helps ensure that each step is done timely and is not skipped or duplicated. Another best practice for the financial close process is to have a checklist that details the steps involved. This will make sure steps are not missed, and that the process is completed in the correct order. The financial close checklist should be distributed to each person involved detailing the responsibilities of all those involved.

Organization

Being organized is likely the most important factor in completing a successful close. Helping each person involved in understanding their responsibilities and sharing best practices will help maintain organization throughout the process. Also, having a plan for dealing with changes, system issues or disasters helps keep everyone organized and aware of their responsibilities. A best practice is to ensure that each person involved in the process is aware of their responsibilities in case of different scenarios; this will ensure that everyone stays organized throughout the process.

The financial close process is important for any business to maintain accurate financial information. Implementing clear channels of communication to ensure proper documentation and understanding of responsibilities and maintaining organization throughout the process will help to ensure an efficient and effective financial close.

Tyler Henkel