5 Steps to an Efficient Month-End Close Process

Having a proper month-end close process is imperative to providing clear and concise financials to executives. The efficiency needed doesn’t just come from utilizing the right technology, but also have a proper set of procedures for your team to follow. However, developing that process takes more than writing some task down on a sheet of paper and calling it a day.

1. Define your deliverables.

When going on a trip, you determine your starting point and your destination. The close process is the same way. It’s impossible to figure out what steps you need to take if you don’t know what you’re trying to achieve. Therefore, defining the deliverables, such as specific reports and analyses, that you expect out of the month-end close process should be the first thing you do.

2. Segment your process and identify tasks

Once the deliverables have been defined, the next step is to determine what tasks need to be completed in order to meet them. Working backwards from your deliverables helps identify those tasks by looking at what you want done and what you need to do to achieve it. While you do this, note how long each task should take, so that when you finish mapping out your process, you also have an idea of the timeline.

3. Determine deadlines

After you have identified your tasks and the time it will take to complete them, you can properly map out your processes and determine your deadlines. When doing this, you should have three dates in mind; the Ideal, the Realistic, and the Delayed. The Ideal Deadline is the date chosen if everything goes according to plan and everything is done as quick and efficient as possible. As there is little chance that no problems will occur, you have the Realistic Deadline, to account for a few issues that may arise or if a task takes some extra time to complete. Finally, the Delayed Deadline is if every task takes extended amounts of time to complete. By having these three deadlines, you and your team have some breathing room when going through the closing process, as well as some benchmarks to look back on. The table below is an example on how to calculate your three deadlines.

4. Track your tasks

Now that you’ve got your deliverables defined, tasks mapped, and your deadlines set, there needs to be a place that you can keep track of your tasks, who they are assigned to, what stage they are in, and when they should be completed. This can be in a spreadsheet or a tool designed to manage them, such as the Loan Vision Close Manager. However you manage it, the tracker should be the central repository of all close-related information.

5. Pre & Post Close Reviews

By holding a review session before beginning the Close process, you and your team can review any changes that have been made to the process, reiterate who is responsible for what tasks, and discuss and troubleshoot any issues that may arise due to incidents in the past month. Similarly, a post-close review allows the team to examine the process, the problems that did happen, and how to improve for next month. In addition, holding these meetings reiterates the fact that the Month-End Close Process is indeed a team effort.

Following these steps will put your department on the right track for a smooth month-end close, but you must also remember that putting a process in place isn’t an “end all, be all”, if you will. Just like anything else in life, it requires care and maintenance, so be sure to continuously evaluate your process and improve where you can.


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