5 Tips to Evaluate Close Quality
Nancy Wu, Head of Client Service
In recent discussions with company Controllers and in monitoring conversations around the web, a prominent theme seems to center around the quality of month-end close activities. As finance and accounting executives set their 2012 objectives to extract process efficiency, they are also recognizing the importance of maintaining and improving the overall quality of the Close.
Well, the bottom line is that what gets measured…gets prioritized, right? Accuracy and Precision
So, if the Close quality is on the finance agenda, be sure to revisit your key performance metrics and embed measurements that can reveal quality-related insights. Need some ideas? Here are five examples:
- Measure amount of mistakes and rework. How many journal entry adjustments were recorded last period due to errors?
- Know the portion of your balance sheet that remains unreconciled or unresolved prior to issuing preliminary financials. Which accounts have activity that is potentially unaccounted for?
Predictability and Consistency
Manageability and Sustainability
- Compare accruals to actuals. How close did you get?
- Compare variability between the FLASH and the final financials. Is your FLASH materially in line with the final numbers?
- Monitor overtime hours. Quality of life matters if you want to keep top talent. Is your team spending many hours during the close doing low-value busy work?