In today’s environment, companies need a close that is both effective and efficient.
- An Effective Close. One that is completely done when originally promised, where you know that every task has been completed, reviewed, and approved. An effective close has been fully analyzed, before it is presented to management and is easier to audit because all supporting documents and procedures are easily available. There are no surprises in an effective close.
- An Efficient Close. A close is efficient when the resources needed to complete the close are used economically. In an efficient close, waiting time is reduced, communication is increased, mistakes and rework minimized, and discrepancies are resolved quickly. A fast close isn’t necessarily efficient, but an efficient close is always faster. In an efficient close you can measure the process as it is completed, today very few companies have the visibility to know how efficiently the close is being performed.
When you optimize your close, you make your own practices more efficient and effective. By optimizing, you increase accuracy, improve communications, reduce waste, and assure completeness. Almost always, as a result of efficiency and effectiveness, your close will become faster, more precise, and less expensive.
Optimizing your close isn’t easy, but it is the best way to achieve a continuously improving close which is the ultimate goal.
The close process is unique, because it is primarily comprised of the items which cannot be handled by your ERP and other systems. Your close is about gathering information from a set of systems, utilizing procedures developed to quickly assemble financial reports, and leveraging a group of people to perform all that work in a short period of time. The challenges addressed in your close are unique to your environment, and constantly changing as a result of changes in your business. Any solution to optimizing your close needs to be customized to your environment, while being able to adapt to changing conditions.
Gary Simon, managing editor at FSN and author of “Fast Close to the Max”, lists some benefits of Hyland Software’s AFRM® that would aid any company in their financial close process.
A true close optimization requires a complete solution, which includes:
- A Solid Proven Methodology – We use the proven methodology of Lean Six Sigma, which emphasizes quality, teamwork, continuous improvement, and uses metrics to find problem areas to help you optimize the processes.
- The Development of Your Best Practices. Your company is unique. Your close process is unique. Simply adopting someone else’s best practices won’t work. Industry best practices can be a starting point, but ultimately, you already have practices which work for your company. What you need is to further develop and optimize the best practices that fit your organization into optimized practices.
- World Class Technology. You need technology that can be customized to your needs in your specific environment. Technology exist which can improve team communications, facilitate process management, increase compliance, electronically track, store and retrieve information, and help you to gather the metrics needed to achieve visibility and support continuous process improvement.
- Focused Resources and Strategy. We assist you in forming and training a team experienced in the close and reporting, as well as provide expertise in the technology, process improvement and change management, necessary to optimize your close. The goals of the team will focus on a low risk and low disruption deployment which teaches optimized close methodology for continuous improvement long after the consultants leave.